Learning Outcomes
This article outlines essential pre-completion steps in conveyancing for SQE1, including:
- Drafting and execution of the transfer deed
- Purpose, timing, and priority mechanics of pre-completion searches (OS1/OS2, K15, K16)
- The registration gap and priority period management
- Preparation of completion statements and coordination of financial and practical arrangements
- Use of the TA13 completion information form and adoption of the Law Society’s Code for Completion by Post
- Undertakings and discharge evidence for mortgage redemptions (DS1/DS3 or electronic discharge)
- Application to SQE1-style scenarios and common pitfalls
SQE1 Syllabus
For SQE1, you are required to understand the practical and legal requirements of the pre-completion stage in property transactions, with a focus on the following syllabus points:
- The purpose and content of the transfer deed and the formalities for its execution.
- The types, timing, and purpose of pre-completion searches and checks.
- The preparation and use of completion statements.
- The coordination of financial arrangements, including mortgage redemptions and undertakings.
- The practical steps and checklists required to ensure a smooth completion.
- Priority periods and the registration gap; searching in the correct name and the effect on priority.
- The Law Society’s Code for Completion by Post and the role of the TA13 completion information and undertakings.
- Lender requirements immediately pre-completion, including the certificate of title, and evidence of discharge of existing charges (DS1/DS3 or electronic discharge).
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 main purpose of a pre-completion Land Registry search (OS1) in a registered land transaction?
- Which party is responsible for preparing the draft transfer deed in a standard freehold sale?
- What is the effect of failing to submit an SDLT return within the required time after completion?
- Name two key items that must be included in a completion statement.
Introduction
The pre-completion stage is a critical phase in any property transaction. It bridges the gap between exchange of contracts and completion, ensuring that all legal, financial, and practical matters are in order before ownership is transferred. Proper execution of the transfer deed, up-to-date pre-completion searches, accurate completion statements, and timely coordination with lenders and the other side minimise the “registration gap” risk between completion and registration. At this point, timescales and deadlines matter: OS1/OS2 priority periods, lender drawdown windows, and the 2 p.m. contractual completion time under standard conditions all require careful diarising and management. A robust checklist, combined with the TA13 completion information form and the Law Society’s Code for Completion by Post, supports a safe, predictable completion day.
Pre-completion Steps: Overview
The main objectives of the pre-completion stage are to:
- Prepare and execute the transfer deed.
- Carry out pre-completion searches to confirm title and solvency.
- Finalise financial arrangements, including mortgage redemptions and completion statements.
- Confirm practical arrangements for completion, such as the handover of keys and documents.
Each step is essential to protect the interests of both buyer and seller and to avoid delays or disputes on completion day. Typical additional tasks include confirming that any special conditions in the contract have been satisfied, re-checking the property shortly before completion for occupation or damage issues, ensuring buildings insurance is in place if risk has passed on exchange, and planning for any apportionments (e.g., ground rent and service charges in leasehold matters). Where there is a chain, transactions must be synchronised and funds may cascade through several completions.
Drafting and Execution of the Transfer Deed
The transfer deed is the legal document that transfers ownership of the property from the seller to the buyer. It must be prepared, agreed, and executed in accordance with strict formalities.
Key Term: transfer deed
The legal document (e.g., TR1 or TP1) used to transfer the legal estate in land from seller to buyer. It must be executed as a deed and comply with Land Registry requirements.
The buyer’s solicitor usually prepares the draft transfer deed, using information from the contract and title documents. For transfers of the whole of the registered title, form TR1 is used; for transfers of part, form TP1 is appropriate and must be accompanied by a Land Registry–compliant plan identifying the part being transferred. The seller’s solicitor reviews and approves the draft, and both parties arrange for execution. In sales of part, care is required to ensure the plan meets HM Land Registry specifications (clear colouring/hatching, scale, north point) and that rights and reservations (easements) and any estate rentcharge or covenants to maintain shared areas are properly drafted in the “additional provisions.”
It is customary for the seller to transfer “with full title guarantee,” but this can be limited where appropriate (for example, by a personal representative), and additional provisions can include any necessary indemnity covenants—e.g., for the buyer to observe restrictive covenants in the charges register and to indemnify the seller against future breach. The buyer must always sign if the deed contains covenants or declarations by the buyer (e.g., an indemnity covenant, a declaration of trust, or covenants on a sale of part).
Key Term: execution as a deed
The process of signing a document in the presence of a witness, with the intention that it is legally binding as a deed.
Execution formalities are strict. Individuals sign in the presence of an independent witness (an adult who is not a party). Companies can execute under Companies Act 2006, section 44: either by two authorised signatories (two directors; or one director and the company secretary) or by a single director in the presence of a witness. Delivery (intention that the deed takes effect) is presumed on execution but can be made subject to completion. Where signing cannot be completed at a meeting, the “Mercury signing approach” is acceptable for certain deeds lodged at HM Land Registry, provided the witness is physically present at the time of signature and the final agreed form is attached to the signed signature page when circulated.
If the proprietorship register contains a Form A restriction (“no disposition by a sole proprietor… unless authorised by the court”), ensure capital money will be received by two trustees or a trust corporation to overreach beneficial interests; this must be reflected in the execution blocks and completion funds routing.
Key Term: certificate of title
A report (often in a prescribed form) given to the lender by the conveyancer shortly before completion, confirming good and marketable title, compliance with the lender’s requirements, and the completion date for drawdown.
Worked Example 1.1
The proprietorship register contains a Form A restriction. The seller is a sole registered proprietor. You are acting for the buyer.
Question: What must you ensure regarding execution and completion to overreach any beneficial interests?
Answer:
Ensure two trustees (or a trust corporation) receive the completion monies. This is usually achieved by appointing a second trustee before completion so the TR1 is executed by both, and the buyer’s solicitor pays completion monies to both trustees. This overreaches the beneficial interests and allows registration despite the Form A restriction.
Pre-completion Searches
Pre-completion searches are essential to confirm that the title remains as expected and that there are no new adverse entries or insolvency issues affecting the parties.
Key Term: pre-completion Land Registry search (OS1/OS2)
A search made against the title number of registered land to check for new entries since exchange and to secure a 30-working-day priority period for registration.
- For registered land, an OS1 (whole) or OS2 (part) search is made against the title number from the search from date on the official copies. Where there is a lender, the search should be made in the lender’s name to protect both the transfer and the charge. The priority period is 30 working days.
- For unregistered land, a Land Charges search (K15) is made against the seller’s name to check for new entries and to secure a 15-working-day priority period for completion.
Key Term: registration gap
The period between completion of a registrable disposition and entry of that disposition on the register. During the gap, the buyer (and lender) have only equitable interests; an effective OS1/OS2 priority protects their applications.Key Term: priority period
The period during which the searcher’s application takes priority over others. For OS1/OS2, it lasts 30 working days to lodge the application for registration. For K15 (unregistered land), it protects completion within 15 working days.Key Term: bankruptcy-only search (K16)
A search made against an individual buyer or borrower to check for bankruptcy entries, usually required by the lender before releasing funds.
If the seller or buyer is a company, a company search is made at Companies House to check for insolvency or undisclosed charges. Consider an urgent telephone search at the Registry of Winding-up Petitions in higher-value or suspect cases. Where the seller is an individual and there are warning signs, an insolvency check can be considered against the seller, though the standard focus is on the borrower for lender purposes. These searches should be done as close as possible to completion.
Key Term: company search
A search at Companies House to confirm a company’s existence, solvency status, and current fixed or floating charges.
Ensure the OS1/OS2 is ordered from the “search from” date shown on the official copies. If an OS1/OS2 reveals a new restriction, notice, or charge, completion should pause until its effect is understood and, where necessary, the entry is complied with or removed. Unilateral notices can be challenged, and the registered proprietor can apply to cancel; if the beneficiary does not respond, the notice may be cancelled.
Key Term: pre-completion Land Charges search (K15)
A search against the seller’s (and sometimes buyer’s) names in unregistered land. It protects the buyer who completes within 15 working days against new entries lodged after the search.
The priority mechanics differ: an OS1/OS2 protects the registration application itself (within 30 working days), while a K15 protects completion within 15 working days. If completion slips beyond the K15 priority period, repeat the search.
Worked Example 1.2
A buyer’s solicitor receives the official copies for a registered property and completes all pre-contract checks. On the day before completion, the solicitor carries out an OS1 search and discovers a new unilateral notice on the title.
Question: What should the solicitor do before proceeding to completion?
Answer:
The solicitor must investigate the nature of the new unilateral notice, raise urgent enquiries with the seller’s solicitor, and ensure the issue is resolved or removed before proceeding. Completion should not take place until the buyer is satisfied that the new entry does not adversely affect the title.
Worked Example 1.3
You acted for a mortgaged buyer but ordered the OS1 priority search in the buyer’s name only. Completion is tomorrow.
Question: What is the risk and what should you do?
Answer:
Searching only in the buyer’s name protects the transfer but not the lender’s charge. The lender’s application could lose priority to competing applications lodged in the gap. Order a fresh OS1 in the lender’s name immediately (and ensure the registration application is lodged within that priority period). If timing makes this impossible, warn the lender and seek instructions; completion may need to be delayed.
Worked Example 1.4
You act for a first lender and completed a legal charge. Your OS1 priority expired yesterday at noon. A second lender lodged a charge application this morning.
Question: What is the consequence?
Answer:
The second lender’s application may take priority over your client’s if your application was not lodged within your priority period. Your client risks being registered behind the second lender. This is a classic priority oversight and may amount to negligence.
Completion Statements and Financial Arrangements
A completion statement is prepared to set out the exact financial sums required to complete the transaction. It includes the purchase price, deposit, apportionments (e.g., rent, service charges), legal fees, SDLT, and any other disbursements.
Key Term: completion statement
A document itemising all sums due on completion, including the balance of the purchase price, apportionments, fees, and taxes.
The seller’s solicitor obtains up-to-date redemption figures for any existing mortgage and gives an undertaking to discharge the mortgage out of the sale proceeds. In leasehold matters, confirm apportionments and whether any balancing service charge or major works demands are pending; consider a retention if appropriate. The buyer’s solicitor ensures mortgage funds and the buyer’s balance are received in cleared funds before completion, issues the lender’s certificate of title in time for drawdown (as per the UK Finance Lenders’ Handbook), and confirms final figures with the client.
Key Term: undertaking
A binding promise by a solicitor to do (or not do) something, such as redeeming a mortgage or sending documents after completion.Key Term: DS1
Evidence of discharge of a registered charge over the whole of a title. It may be lodged electronically (e-DS1) or by confirmation of electronic discharge.Key Term: DS3
Evidence of discharge of a registered charge over part of a title (commonly on estate plots). It must include a plan identifying the part released.
Where possible, electronic discharge is now routine; otherwise, DS1/DS3 should be provided post-completion in accordance with the undertaking. For unregistered land, a receipted mortgage deed or deed of release is required. The completion statement should also address telegraphic transfer (CHAPS) fees, VAT on professional charges, and any agreed retentions or allowances.
In England, the SDLT return is due within 14 days of completion; in Wales, the LTT return is due within 30 days. Both are payable on any VAT-inclusive consideration. Factoring these tax payments into pre-completion financial planning avoids avoidable post-completion penalties.
Worked Example 1.5
The seller’s solicitor receives a redemption statement showing a mortgage balance of £120,000. The sale price is £200,000. On completion, the buyer’s solicitor sends the purchase money to the seller’s solicitor.
Question: What must the seller’s solicitor do regarding the mortgage?
Answer:
The seller’s solicitor must use the sale proceeds to redeem the mortgage in full, provide evidence of discharge to the buyer’s solicitor (e.g., DS1 or confirmation of electronic discharge), and fulfil any undertaking given in the completion information form.
Worked Example 1.6
You act on a leasehold purchase. Completion is on 15 June. Quarterly rent and service charge were demanded on 1 June and paid by the seller.
Question: What apportionments should be reflected on the completion statement?
Answer:
The buyer reimburses the seller the rent/service charge from (and including) 15 June to the day before the next quarter day, calculated on a daily basis. If there is a risk of a balancing charge, the buyer may seek a retention pending the year-end service charge reconciliation.
Practical Arrangements and Checklists
A standard completion checklist should be used to ensure that all steps are completed. Key items include:
- Confirming execution of the transfer deed.
- Checking that all pre-completion searches are clear and within their priority periods.
- Ensuring mortgage funds and buyer’s balance are in cleared funds.
- Preparing and agreeing the completion statement.
- Confirming arrangements for key handover and document exchange.
- Ensuring all undertakings (e.g., mortgage discharge) are in place.
Key Term: completion information form (TA13)
A standard form used to confirm practical arrangements for completion, including undertakings to discharge mortgages and details of key handover.
The TA13 dovetails with the Law Society’s Code for Completion by Post (2019), which sets the framework for remote completions.
Key Term: Law Society’s Code for Completion by Post
A protocol under which the seller’s solicitor agrees to send the title documents on the day of completion and the buyer’s solicitor’s funds are held to order until completion is confirmed. It standardises responsibilities and undertakings for postal/remote completion.
Practicalities matter on the day: under the Standard Conditions of Sale and the Standard Commercial Property Conditions, completion is usually by bank transfer, with the contractual time for completion at 2 p.m. (unless varied). Keys are normally released via the estate agent only on confirmation of completion by the seller’s solicitor. In residential cases, ensure vacant possession and consider re-inspection or client confirmation that the property is vacant before transferring funds. Diarise OS1/OS2 priority expiry and HM Land Registry application windows, and ensure meter readings and “clear out” of the property are addressed where relevant.
Where a buyer requests access before completion, do not inadvertently create a tenancy. If access is agreed, record it as a licence on Standard Condition 5.2 terms (or bespoke terms in commercial cases), with appropriate limitations and termination triggers.
Key Term: company search
A final check (typically on completion day or the day before) against a company seller or buyer to ensure no winding-up petitions, administration, or new charges jeopardise the deal.
Worked Example 1.7
You are adopting the Code for Completion by Post. Funds have left the buyer’s client account at 12:05 p.m., but the seller’s solicitor has not yet received them. The seller is pressing for simultaneous exchange and completion of an onward purchase.
Question: What should you do?
Answer:
Confirm the CHAPS payment reference and bank details with the seller’s solicitor, continue to monitor receipt, and keep the chain informed. Until receipt is confirmed and completion is agreed, the funds are held to the buyer’s order under the Code; do not treat completion as having occurred. If bank cut-off times threaten delay, agree a revised completion time or a later day, documenting any compensation arrangements under the contract.
Revision Tip
Use a written checklist for every transaction. Tick off each item as it is completed to reduce the risk of missing a critical step.
Key Point Checklist
This article has covered the following key knowledge points:
- The transfer deed must be prepared, agreed, and executed as a deed before completion; use TR1 for whole, TP1 for part with a compliant plan.
- Pre-completion searches (OS1/OS2, Land Charges, bankruptcy/company) are essential to confirm title and solvency and to secure a priority period.
- Searching in the lender’s name protects both the transfer and the charge; diarise and use the priority period to lodge applications within time.
- A completion statement sets out all sums due, including apportionments, lender funds, fees, TT costs, and taxes; it should reflect SDLT/LTT timings.
- The seller’s solicitor must obtain redemption figures and give undertakings to discharge any mortgage; provide DS1/DS3 or electronic discharge evidence.
- Adopt the TA13 and the Law Society’s Code for Completion by Post to structure undertakings, document delivery, and risk allocation.
- Confirm practical arrangements for completion, including key handover, confirmation of vacant possession, and chain management.
- Manage registration gap risk with timely OS1/OS2 searches, prompt post-completion applications, and rigorous diary controls.
Key Terms and Concepts
- transfer deed
- execution as a deed
- pre-completion Land Registry search (OS1/OS2)
- registration gap
- priority period
- bankruptcy-only search (K16)
- pre-completion Land Charges search (K15)
- company search
- completion statement
- undertaking
- DS1
- DS3
- certificate of title
- Law Society’s Code for Completion by Post
- completion information form (TA13)