Completion and post-completion steps - Methods and effect of...

Learning Outcomes

This article outlines completion methods, the legal effect of completion, and essential post-completion steps required to finalise a transfer of title, including:

• Main methods of completion in property transactions
• Legal effect of completion
• Essential post-completion steps to finalise a transfer of title
• Key documents, statutory deadlines, and practical requirements for completion and registration
• Application of these principles to SQE1-style scenarios
• Time-of-day rules for completion and contractual compensation for delay
• Management of the registration gap using pre-completion priority searches
• Appropriate undertakings and evidence of discharge to deliver title free of charges

SQE1 Syllabus

For SQE1, you are required to understand the practical and legal steps involved in completing a property transaction and the consequences of completion, with a focus on the following syllabus points:

• The main methods of completion (personal attendance, by post, electronic)
• The legal effect of completion (transfer of title, registration, risk, and obligations)
• Post-completion steps (SDLT/LTT, registration, discharge of mortgages)
• The Law Society Code for Completion by Post and its significance
• The consequences of failing to comply with post-completion requirements
• Time-of-day rules for completion and contractual compensation for delay
• Priority period protection for registration and the registration gap

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. What are the main methods by which completion can take place in a property transaction?
2. When does legal title pass to the buyer in registered land?
3. What is the effect of failing to pay Stamp Duty Land Tax (SDLT) within the statutory deadline?
4. What is the purpose of Form DS1 in the post-completion process?

Introduction

Completion is the critical stage in a property transaction where the contract is fulfilled, the purchase money is paid, and the legal title is transferred. Understanding the methods of completion, their legal effect, and the mandatory post-completion steps is essential for SQE1. This article explains the main procedures, the consequences of completion, and the practical steps required to ensure a valid and effective transfer of property, including how to manage the registration gap, comply with statutory filing deadlines, and implement appropriate undertakings to redeem existing charges.

Key Term: completion
The process by which the balance of the purchase price is paid, documents are exchanged (or posted under undertakings), and the transfer is dated, so the buyer acquires title (in unregistered land immediately; in registered land upon registration).

Methods of Completion

Completion can be effected in several ways, depending on the nature of the transaction and the parties' preferences. In all cases, practical arrangements (place, time, funds routing) are governed by the contract and the applicable standard conditions.

Personal Attendance

Traditionally, solicitors for both parties meet in person to exchange documents and funds. This method allows for immediate resolution of issues but is now rare in routine transactions due to logistical challenges. Where completion takes place in person:

• The buyer’s solicitor arranges for cleared funds to be sent to the seller’s solicitor’s client account and attends at the place of completion (usually the seller’s solicitor’s office).
• The buyer’s solicitor verifies title documents handed over, which is particularly relevant for unregistered land (comparison against the epitome and any recited plans).
• The seller’s solicitor dates the transfer deed once funds are received and agrees release of keys with the agent.
• A schedule of deeds is typically exchanged, with the buyer’s solicitor signing for receipt of the listed documents.

Under the Standard Conditions of Sale (SC 6.2.2) and the Standard Commercial Property Conditions (SCPC 9.2.2), completion usually takes place at the seller’s solicitor’s office unless otherwise agreed.

Completion by Post

Most residential and many commercial transactions are completed by post, following the Law Society’s Code for Completion by Post. The seller’s solicitor acts as agent for the buyer’s solicitor, holding documents and funds on trust until completion is confirmed. This method has become the default because it is time-efficient and supported by a robust framework of undertakings.

Key Term: Law Society Code for Completion by Post
A set of professional undertakings and procedures governing postal completion, ensuring security and clarity in the exchange of documents and funds. The seller’s solicitor undertakes to send completion documents by first-class post or DX on the day of completion and to carry out the buyer’s solicitor’s instructions on completion.

Practical features of the Code include:

• Agreement in advance to adopt the Code (implied when the residential Protocol is used).
• Purchase monies are held to the buyer’s solicitor’s order and not released until completion is agreed.
• On receipt of funds, the seller’s solicitor dates the transfer, confirms completion by phone/email, agrees release of keys, and undertakes to send the agreed completion documents the same day.
• Undertakings include redemption of listed mortgages from completion monies and prompt provision of evidence of discharge.

Completion by post relies on undertakings, so clarity in the Completion Information and Undertakings form (TA13) is essential. Any variation to the standard undertakings (e.g., document delivery next day) must be expressly agreed.

Electronic Completion

Increasingly, completion is achieved using electronic funds transfer and digital document exchange. This method is efficient and secure, provided that robust verification and anti-fraud measures are in place. Under the SC and SCPC, completion funds must be paid by direct electronic transfer from a conveyancer’s account (SC 6.7; SCPC 9.7). HM Land Registry supports electronic discharges of charges (e‑DS1) and the Electronic Discharge (ED) service, cutting delays in evidence of discharge reaching the register. For execution of deeds, HM Land Registry allows the Mercury signing approach for certain dispositions, but firms must ensure execution formalities are satisfied for TR1/TP1 and mortgage deeds.

Note: It is not possible to complete “by phone”. Although solicitors will speak to confirm receipt of funds and release of keys, completion itself is effected by receipt of cleared funds and dating of the deed.

Legal Effect of Completion

Completion has several immediate legal consequences, and it is important to distinguish between unregistered and registered land, and to understand the time-of-day rules that can affect the “date of completion”.

• The buyer becomes entitled to the legal estate (in unregistered land, title passes on completion by delivery and dating of the transfer; in registered land, title passes on registration of the disposition).
• The seller is obliged to hand over the executed transfer deed and any other agreed documents (such as guarantees, planning permissions, and title deeds for unregistered land).
• Outgoings (e.g., council tax, utilities, ground rent, service charges) are typically apportioned to the date of completion; the buyer assumes ongoing liabilities from completion day.
• The seller’s mortgage must be discharged, and the property is transferred free of charges unless otherwise agreed (e.g., a sale subject to a tenant’s charge).

Key Term: transfer deed (TR1)
The legal document used to transfer title in registered land from seller to buyer, executed as a deed and submitted to HM Land Registry.

Key Term: DS1
The form used to confirm the discharge of a registered charge (mortgage) over the whole of a registered title at HM Land Registry.

Key Term: DS3
The form used to confirm discharge of a registered charge over part of a registered title (on a sale of part). A plan identifying the released land must be annexed, and the lender’s execution is required.

Time-of-day rules and late funds:

• Unless varied by special condition, completion must take place by 2 pm on the agreed date (SC 6.1.2; SCPC 9.1.2). If funds are received after 2 pm, completion is treated as having occurred on the next working day, and contractual compensation may be payable at the contract rate for the period of delay (SC 7.2; SCPC 10.3).
• Keys are released when completion is agreed, typically immediately after the seller’s solicitor confirms receipt of cleared funds and dates the transfer.

Risk and insurance:

• Under SC 5.1, the property is at the buyer’s risk from exchange of contracts unless otherwise agreed. Therefore, by completion the buyer usually already bears the risk and should have insurance in place from exchange. If a special condition keeps the risk with the seller until completion, the contract should specify how insurance proceeds are to be handled if damage occurs between exchange and completion.

Registration gap in registered land:

• Between completion and registration, the buyer holds an equitable interest. Priority obtained by the OS1/OS2 pre-completion search protects the buyer and any lender from third-party entries made during the priority period (usually 30 working days). Timely submission of the AP1 within the priority period is necessary to avoid loss of priority.

Post-Completion Steps

After completion, both solicitors must carry out several critical steps to finalise the transaction and protect their clients’ interests. These steps are time-sensitive and underpin the buyer’s ability to register title and any lender’s charge.

Payment of SDLT/LTT

The buyer’s solicitor must calculate and pay Stamp Duty Land Tax (SDLT) in England within 14 days of completion, and Land Transaction Tax (LTT) in Wales within 30 days of completion. A certificate of payment (SDLT5 or LTT certificate) is required for registration.

Key Term: SDLT5
The certificate issued by HMRC confirming payment of Stamp Duty Land Tax, required for registration of the transfer at HM Land Registry.

Failure to submit the return and pay by the deadline incurs penalties and interest and will prevent registration of title or any charge until the certificate is produced.

Registration at HM Land Registry

The buyer’s solicitor must submit an application to HM Land Registry to register the transfer of title (using Form AP1), the executed transfer deed (TR1), the SDLT/LTT certificate, and, if applicable, the mortgage deed. This must be done within the priority period of the pre-completion search (usually 30 working days from the OS1/OS2 search certificate date).

Key Term: AP1
The application form used to register a transfer or other disposition of registered land at HM Land Registry.

Core points for registration:

• Applications should include evidence of discharge of any existing charges (DS1 or DS3, or confirmation of e‑DS1/ED submission), the buyer’s mortgage deed, and the Companies House registration certificate if the buyer is a company borrower (with confirmation that it relates to the same charge).
• An AP1 can be supported by certified copies of documents rather than originals if submitted by a conveyancer.
• For unregistered land, first registration must be made within two months on Form FR1. Failure to apply within two months causes the legal estate to revert to the transferor as trustee and leaves the transferee with only an equitable interest until registration is completed.

Where the buyer is a company, any new charge must be registered at Companies House within 21 days of creation on Form MR01. Failure to register renders the charge void against a liquidator, administrator, or creditors, and can leave the lender unsecured.

Discharge of Seller’s Mortgage

The seller’s solicitor must use the sale proceeds to redeem any existing mortgage and provide evidence of discharge to the buyer’s solicitor to satisfy undertakings and enable registration “free of charges”.

• For a whole-title discharge: Form DS1 (or e‑DS1/ED if the lender uses electronic discharge).
• For discharge over part on sale of part: Form DS3 (with an annexed plan identifying released land).
• For unregistered land: the original legal mortgage should be returned with a vacating receipt endorsed or a separate deed of release.

Evidence should be sent to the buyer’s solicitor promptly once received from the lender; failure to do so risks delaying registration and breaching undertakings.

Notices and Compliance

If the property is leasehold, the buyer’s solicitor must serve notice of transfer and any new mortgage on the landlord or management company within the timeframe specified in the lease, paying any required fees. Service charge apportionments may require a retention to cover post-completion adjustments when final accounts are issued. If a residents’ management company issues share certificates or membership certificates, the buyer’s solicitor should arrange completion of any stock transfer forms and obtain the new certificate for the buyer.

Other Post-Completion Actions

• The seller’s solicitor pays the estate agent’s fees (if authorised) and accounts to the client for the balance of sale proceeds.
• Both solicitors report completion to their clients and, for the buyer, provide the Title Information Document once HM Land Registry updates the register. Any errors should be raised with HM Land Registry promptly for correction.
• Close the file after all undertakings are discharged and all post-completion filings and notices are complete.

Worked Example 1.1

A buyer completes the purchase of a registered freehold property. The buyer’s solicitor pays the purchase price, receives the signed TR1, and the keys are released. What must the buyer’s solicitor do next?

Answer:
The buyer’s solicitor must pay SDLT within 14 days (or LTT within 30 days in Wales), submit Form AP1 with the TR1 and SDLT5/LTT certificate to HM Land Registry within the priority period, and, if there is a mortgage, register the lender’s charge. If the property is leasehold, notice of transfer and charge must be served on the landlord, and any share or membership certificate requirements must be addressed.

Worked Example 1.2

The seller’s solicitor receives the redemption figure for the seller’s mortgage and, on completion, pays off the mortgage using the sale proceeds. What evidence must be provided to the buyer’s solicitor?

Answer:
The seller’s solicitor must provide evidence of discharge by submitting Form DS1 (or electronic discharge confirmation via e‑DS1/ED) to HM Land Registry and notifying the buyer’s solicitor once the charge has been removed from the register. For a sale of part, a DS3 with an annexed plan is required.

Worked Example 1.3

Completion of a purchase in Wales takes place on Monday, 1 July. By when must the LTT return be submitted and the tax paid to avoid penalties and ensure registration can proceed?

Answer:
The LTT return and payment must be submitted to the Welsh Revenue Authority within 30 days of completion, by Wednesday, 31 July. The WRA certificate is then provided with the AP1 to HM Land Registry.

Worked Example 1.4

Funds arrive with the seller’s solicitor at 3:12 pm on the agreed completion date. How is completion treated under the standard conditions, and what is the impact?

Answer:
Under SC 6.1.2/SCPC 9.1.2, completion is treated as having occurred on the next working day. Contractual compensation at the contract rate is payable for the period of delay (SC 7.2/SCPC 10.3), calculated on the balance of the purchase price (less deposit if the buyer is the defaulting party).

Exam Warning

Failing to pay SDLT or LTT within the statutory deadline will result in penalties and prevent registration of the buyer’s title. Registration must be completed within the priority period to avoid loss of priority to third-party interests. If completion funds are received after 2 pm, completion is treated as occurring on the next working day, and contractual compensation at the contract rate may be payable.

Revision Tip

Diarise all statutory deadlines for SDLT/LTT payment and registration. Use a checklist (including the Completion Information and Undertakings form) to ensure all post-completion steps are completed promptly and undertakings are discharged without delay.

Summary

Completion is the point at which the contract is fulfilled, the purchase price is paid, and the legal title is transferred. The main methods of completion are personal attendance, by post (using the Law Society Code), and electronically (with funds sent by telegraphic transfer). The legal effect of completion includes dating the transfer, release of keys, apportionment of outgoings, and the buyer’s obligation to register title (with priority protected by the OS1/OS2 search). In registered land, legal title passes on registration; in unregistered land, on completion with first registration required within two months. Post-completion, the buyer’s solicitor must pay SDLT/LTT, register the transfer and any mortgage, and serve required notices (particularly in leasehold cases). The seller’s solicitor must discharge any mortgage and provide evidence of discharge (DS1 or DS3, or e‑DS1/ED). Time-of-day rules matter: if funds arrive after 2 pm, completion is deemed to occur on the next working day, and contractual compensation may be payable. Failure to comply with post-completion requirements can result in penalties, loss of priority, delayed registration, or breach of undertaking.

Key Point Checklist

This article has covered the following key knowledge points:

• The main methods of completion are personal attendance, by post (Code for Completion by Post), and electronic completion.
• Completion effects include dating the transfer, release of keys, apportionment of outgoings, and delivery of agreed documents.
• In registered land, legal title passes on registration; in unregistered land, on completion (with first registration required within two months).
• Pre-completion priority searches protect against the registration gap; registration must be within the priority period.
• Funds must be received by 2 pm or completion is treated as the next working day; contractual compensation may be payable for delay.
• The buyer’s solicitor must pay SDLT within 14 days (England) or LTT within 30 days (Wales) and register the transfer and any mortgage.
• The seller’s solicitor must redeem any existing mortgage and provide evidence of discharge (Form DS1 or DS3; or e‑DS1/ED).
• Notices of transfer and charge must be served in leasehold transactions; consider retentions for service charge reconciliations.
• Failure to comply with post-completion steps can result in penalties, loss of priority, or unenforceable title and breach of undertakings.

Key Terms and Concepts

• completion
• Law Society Code for Completion by Post
• transfer deed (TR1)
• DS1
• DS3
• SDLT5
• AP1