Learning Outcomes
By the end of this article, you will be able to identify and explain the essential post-completion steps in property transactions, including the payment of SDLT or LTT, registration of title, discharge of existing mortgages, and protection of lender interests. You will be able to apply these procedures to SQE1-style scenarios, understand statutory deadlines, and advise clients on the consequences of non-compliance.
SQE1 Syllabus
For SQE1, you are required to understand the post-completion procedures that follow completion of a property transaction. Focus your revision on:
- the legal requirements and deadlines for payment of Stamp Duty Land Tax (SDLT) or Land Transaction Tax (LTT)
- the process and time limits for registration of title at HM Land Registry (including first registration)
- the discharge of existing mortgages and the removal of charges from the register
- the steps required to protect a lender’s interest, including registration of the new mortgage
- the consequences of failing to comply with statutory deadlines and procedural requirements.
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.
- What is the statutory deadline for submitting an SDLT return and paying SDLT after completion of a property purchase in England?
- What is the effect of failing to register a property transfer at HM Land Registry within the priority period of the pre-completion search?
- Who is responsible for discharging an existing mortgage after completion, and what document is used to remove the charge from the register?
- Why must a lender’s charge be registered promptly after completion?
Introduction
Post-completion steps are the final, critical procedures that ensure the legal transfer of property is effective and that all parties’ interests are protected. These steps include paying any SDLT or LTT due, registering the new owner’s title, removing existing mortgages, and registering new charges for lenders. Each step is subject to strict statutory deadlines and procedural requirements. Failure to comply can result in penalties, loss of priority, or defective title.
SDLT/LTT: Payment and Deadlines
After completion, the buyer’s solicitor must submit the SDLT (or LTT in Wales) return and pay any tax due. This must be done within 14 days of completion for SDLT, or 30 days for LTT. The return is required even if no tax is payable.
Key Term: Stamp Duty Land Tax (SDLT)
SDLT is a tax payable on land transactions in England and Northern Ireland, calculated on the purchase price and due within 14 days of completion.Key Term: Land Transaction Tax (LTT)
LTT is the equivalent tax payable on land transactions in Wales, due within 30 days of completion.
A certificate (SDLT5 or LTT certificate) is issued as proof of payment. This certificate is required for registration of the transfer at HM Land Registry.
Worked Example 1.1
A buyer completes the purchase of a freehold house in England for £400,000. When must the SDLT return be submitted, and what is the consequence of missing the deadline?
Answer: The SDLT return must be submitted, and any tax paid, within 14 days of completion. Failure to do so will result in automatic penalties and interest.
Registration of Title
The buyer’s solicitor must apply to HM Land Registry to register the transfer of title. For registered land, the application must be made within the 30-working-day priority period of the pre-completion OS1/OS2 search. For unregistered land, first registration must be completed within two months of completion.
Key Term: priority period
The period (usually 30 working days) during which the buyer’s application to register the transfer has priority over other applications.Key Term: class of title
The quality of title awarded by HM Land Registry (absolute, possessory, or qualified), affecting the level of state guarantee.
If registration is not completed within the priority period, the buyer risks losing priority to third-party interests. For first registration, failure to register within two months renders the transfer void as regards the legal estate.
Worked Example 1.2
A buyer’s solicitor completes a purchase of unregistered land on 1 June. By what date must the application for first registration be submitted?
Answer: The application for first registration must be submitted within two months of completion, so by 1 August.
Discharge of Existing Mortgages
If the seller’s property is subject to a mortgage, the seller’s solicitor must use the sale proceeds to redeem the mortgage immediately after completion. The lender will then provide evidence of discharge, usually by electronic notification or a DS1 form (for registered land). The seller’s solicitor must send this evidence to the buyer’s solicitor to fulfil their undertaking.
Key Term: DS1 form
A document executed by the lender confirming that a registered charge (mortgage) has been discharged.Key Term: undertaking
A binding promise by a solicitor to do something, such as redeem a mortgage and provide evidence of discharge.
If the mortgage is not discharged, the buyer may not be able to register their title free of the charge.
Worked Example 1.3
On completion, the seller’s solicitor undertakes to redeem the mortgage and provide a DS1. What should the buyer’s solicitor do if the DS1 is not received within a reasonable time?
Answer: The buyer’s solicitor should chase the seller’s solicitor for evidence of discharge, as the buyer’s registration may be delayed or refused without it.
Registration of the Lender’s Charge
If the buyer has purchased with a mortgage, the lender’s charge must be registered at HM Land Registry at the same time as the transfer. If the buyer is a company, the charge must also be registered at Companies House within 21 days of creation.
Key Term: charge
A legal interest registered against the property to secure repayment of a loan (mortgage).Key Term: Companies House registration
The process of registering a company’s charge at Companies House within 21 days to ensure its enforceability against third parties.
Failure to register the lender’s charge may result in the lender losing its security over the property.
Worked Example 1.4
A company buys a property with the aid of a mortgage. The solicitor forgets to register the charge at Companies House within 21 days. What is the consequence?
Answer: The charge will be void against a liquidator or creditors if the company becomes insolvent, and the lender may lose its security.
Consequences of Non-Compliance
Missing statutory deadlines for SDLT/LTT, registration, or mortgage discharge can result in:
- financial penalties and interest (for late tax payment)
- loss of priority to third-party interests (for late registration)
- defective or void title (for failure to register first registration)
- unenforceable lender security (for failure to register a company charge)
- professional negligence claims against the solicitor.
Worked Example 1.5
A buyer’s solicitor fails to register the transfer within the priority period, and a third party registers a charge against the property. Who has priority?
Answer: The third party’s charge will take priority over the buyer’s application if the buyer’s registration is not protected by a valid priority period.
Key Point Checklist
This article has covered the following key knowledge points:
- SDLT (England) must be paid and the return submitted within 14 days of completion; LTT (Wales) within 30 days.
- The SDLT5 or LTT certificate is required for registration of title at HM Land Registry.
- The buyer’s solicitor must apply to register the transfer within the 30-working-day priority period (registered land) or two months (first registration).
- The seller’s solicitor must redeem any existing mortgage and provide evidence of discharge (DS1 or electronic notification).
- The lender’s charge must be registered at HM Land Registry, and at Companies House within 21 days if the buyer is a company.
- Failure to comply with statutory deadlines can result in penalties, loss of priority, or defective title.
Key Terms and Concepts
- Stamp Duty Land Tax (SDLT)
- Land Transaction Tax (LTT)
- priority period
- class of title
- DS1 form
- undertaking
- charge
- Companies House registration
