Colin secured a loan on his family’s only property
in December 2004. The loan is unregulated
because it is:
a) a bridging loan.
b) for debt consolidation.
c) a home improvement loan.
d) a second charge.
2 Which of the following is correct in relation to the
role of estate agents?
a) An estate agent selling a house for one party
cannot, at the same time, provide any services for
the buyer.
b) Their charges are usually on a flat fee basis or a
percentage of the purchase price.
c) They act as agents to both the buyer and the
seller.
d) They must always accompany prospective
purchasers during the viewing of a property.
3 Which of the following is true of covenants?
a) They are imposed by the Land Registry.
b) They are passed on with the property.
c) They indicate a right that one person has over the
property of another.
d) They ‘run with the buyer’.
4 Andrew’s house in Glasgow has been sold by the
same process as his former house in London. This
confirms that the sale was by:
a) cash only.
b) private treaty.
c) secret bidding.
d) unconditional offer.
5 Details of each property registered at the Land
Register include all of the following information,
except:
a) beneficial easements.
b) the location of the property.
c) the name of the person entitled to the property.
d) the size of the property as measured in square
metres.
6 Which of the following statements is true in
relation to a buyer withdrawing from a house
purchase transaction the day before exchange of
contracts?
a) Because of the lateness of the withdrawal, the
vendor is entitled to retain the deposit paid.
b) Because the vendor had accepted the offer to buy
in good faith, he may sue for breach of contract.
c) The potential buyer is entitled to withdraw and has
no liability for expenses or other costs.
d) The vendor is entitled to claim all reasonable
expenses incurred to date.
7 In Home Information Packs for property sales,
which of the following optional items of
information would be applicable to a leasehold
property but not for a freehold property?
a) A home condition report.
b) A home use form.
c) A summary of any work being undertaken.
d) Warranties and guarantees.
8 Jake’s lender has insisted on a retention. What implications does this have for Jake?
a) He will not receive the full mortgage amount initially.
b) Jake must hold back some of the purchase price from the vendor until the lender is satisfied that the property is sound.
c) The lender will retain some of his deposit until he
has answered further questions.
d) There are no implications for Jake as it is a
technical requirement of concern only to the lender.
9 A survey report has recommended an undertaking requiring alterations to the property. When, normally, must this work be carried out?
a) At any point during the mortgage term.
b) Between exchange of contracts and completion.
c) Within a maximum of two weeks prior to
exchange of contracts.
d) Within a specified number of months following
completion.
10 At his local property auction, Geoff has successfully bid £90,000 for a house, for
which he will require a mortgage. What financing arrangements are required?
a) He must pay a £9000 deposit immediately after the auction, and seek a mortgage when he has exchanged contracts the following week.
b) He must pay a £9000 deposit immediately after
the auction. As he will exchange contracts at that
point he must have a mortgage agreement in place
by then.
c) He must pay the full £90,000 immediately
after the auction, so the mortgage funds must be
available then.
d) Once he has paid an agreed deposit, the vendor
will hold the property until Geoff has arranged
a mortgage, at which point contracts will be
exchanged.
ANSWERS
1 d) Regulated mortgage status applies to contracts entered into
after 31st October 2004, subject to other criteria. These criteria relates
specifically to first mortgages, therefore second charges are excluded.
2 b) An estate agent is usually paid on a commission basis, expressed
as a percentage of the sale price or a flat fee.
3 b) Covenants are passed on to all subsequent purchasers of the
land, which remains subject to them.
4 b) Private treaty or bargain is a sale process common throughout
the UK.
5 d) The property register holds details of the land and a plan of the
property but not its exact size.
6 c) The date that contracts are exchanged is the point of no return.
Withdrawal from the process before that date can be made without
financial penalty.
7 c) A summary of any work being undertaken would apply to a
leasehold property but not a freehold property. The other items could
apply to both.
8 a) A retention is where a lender holds back a sum of money from the
advance pending repairs being carried out to the lender’s satisfaction.
This obviously initially reduces the amount available.
9 d) An undertaking will carry with it a specified time period, usually a
matter of months, during which the alterations should be completed.
10 b) Once a bid is accepted, a 10% deposit is paid and contracts
are exchanged, meaning that the purchaser must have a mortgage
agreement in place at that time.
