Freehold real estate law and practice - Completion and post-...

Learning Outcomes

This article covers completion and post-completion in freehold conveyancing, including:

• The practical sequence of completion, standard timings, exchange of funds, possession, and transfer, subject to registration
• Core documentation and undertakings (TR1/TP1 transfers, TA13 Completion Information and Undertakings, redemption statements)
• The respective responsibilities of the seller’s and buyer’s solicitors at completion and immediately thereafter
• The Law Society’s Code for Completion by Post, agency effect, and enforceable professional undertakings
• Pre-completion searches and priority management (OS1/OS2, K15/K16, company searches) and the registration gap
• Post-completion formalities and deadlines: SDLT/LTT, HM Land Registry applications (AP1/FR1), and Companies House filings (MR01)
• Evidence of mortgage discharge (DS1/DS3 or Electronic Discharge) and delivery to the buyer’s solicitor
• Contractual remedies for late completion (contract rate compensation, notice to complete, rescission) and common exam pitfalls
• Professional consequences of breaching undertakings and practical steps to mitigate risk

SQE2 Syllabus

For SQE2, you are required to understand the procedural management of completion and post-completion and advise accurately on documentation, undertakings, searches, and remedies, with a focus on the following syllabus points:

• the typical completion and post-completion stages in freehold conveyancing
• required documentation and standard completion undertakings
• the pre-completion checks and actions of seller’s and buyer’s solicitors
• the handling of post-completion formalities, including stamp duty and registration
• common exam pitfalls and the practical consequences of errors
• the sequence and practical workflow of completion and post-completion steps
• standard undertakings and their enforceability
• how and when possession, title, and funds are exchanged between the parties
• the specific post-completion obligations of both solicitors and consequences of failure to perform key tasks
• the typical ways errors may be examined in the SQE2 assessment

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 is the function of a completion undertaking given by the seller’s solicitor, and what are the consequences if it is breached?
2. Which form is ordinarily used to confirm redemption of a mortgage on registered land after completion?
3. Describe the required steps taken by the buyer’s solicitor after completion to ensure the buyer’s title is protected.
4. What are the practical risks if the SDLT return is not submitted within the statutory time limit?

Introduction

Completion and post-completion are the final stages of a freehold real estate transaction. For SQE2, you must be able to set out (and apply in scenario problems) the practical sequence and legal implications of completion, the documentation involved, the scope and enforceability of undertakings, and the administrative or legal risks if standard protocols are not followed. Appreciating the “registration gap” in registered land is important: completion transfers the legal estate only once the disposition is completed by registration; until then, protection depends on an OS1/OS2 search and its priority period.

Key Term: completion
The point in the transaction where the seller receives the balance purchase price, the buyer gains entitlement to possession, and ownership is transferred (subject to registration).

Completion – The Key Features

Completion is the agreed point when the transaction is finalised: funds are transferred, the buyer acquires a right to possession, and formal ownership passes (subject to registration). It is critical to understand the normal procedure, the function and effect of undertakings, and who bears the risk/responsibility for documentation, title, and money at each step. In registered land, legal title passes only once the transfer is registered; in unregistered land, legal title passes on completion, with first registration required within two months.

The standard completion time under the commonly used Standard Conditions of Sale (SCs) and Standard Commercial Property Conditions (SCPCs) is 2 p.m. on the completion date. If funds are received after 2 p.m., completion is deemed to have taken place on the next working day, with potential contractual compensation.

A ready-to-complete file will have: a properly executed transfer (TR1 for a transfer of whole or TP1 for a transfer of part), any related documents (e.g., undertakings, replies to completion information, redemption statements), and confirmation that pre-completion searches have been carried out and are clear.

Completion – Typical Steps and Sequence

Seller’s solicitor (completion stage)

• Confirms receipt of completion money from the buyer’s solicitor.
• Releases keys to the buyer (usually via the estate agent once completion is agreed).
• Completes and dates the transfer deed.
• Provides an undertaking (in writing) to redeem any outstanding mortgage and submits the necessary discharge form to the lender.
• Hands over (directly or by post) the original transfer, any title documents, and relevant undertakings to the buyer’s solicitor.
• Confirms place and method of completion and accounts details through the Completion Information and Undertakings form (Protocol form TA13), including:
  • Where keys will be held/released.
  • Documents to be supplied on completion (including title deeds for unregistered land).
  • Bank details and exact amount required on completion (net of deposit released).
  • Undertakings to redeem each listed mortgage/charge and to forward DS1/DS3 or confirmation of electronic discharge when received.

Key Term: completion undertaking
A binding professional promise (usually in writing) by the seller’s solicitor to, for example, redeem a mortgage on or after completion and deliver evidence of discharge to the buyer’s solicitor.

Buyer’s solicitor (completion stage)

• Sends the completion monies (via bank transfer) to the seller’s solicitor, usually held “to the seller’s solicitor’s order” until completion is confirmed.
• Obtains the transfer deed, keys, and evidence of discharge of any seller’s mortgage (if available at that point).
• Checks the documents received match those agreed in the pre-completion stage (including execution formalities and any annexed plans).
• Ensures pre-completion searches are complete and in date:
  • OS1/OS2 for registered titles (providing a 30 working day priority period).
  • K15 Land Charges search for unregistered titles (providing a 15 working day priority period to complete).
  • Bankruptcy-only K16 if acting for a lender where the buyer is an individual.
  • Company search if the seller or buyer is a company.
• Coordinates drawdown from any lender (certificate of title and conditions satisfied) and verifies cleared funds in time.

Key Term: OS1/OS2
Official Search with Priority against the whole (OS1) or part (OS2) of a registered title. The result updates official copies and grants a 30 working day priority period to submit and protect the buyer’s registration.

Completion by Post and Standard Undertakings

The Law Society Code for Completion by Post is widely used. It sets out how documents and funds are exchanged when solicitors are not meeting in person and imposes professional undertakings on both firms. Under the Code, the seller’s solicitor acts as unpaid agent for the buyer’s solicitor to complete on their behalf. The seller’s solicitor must be certain that all obligations are within their client’s authority and that any undertakings given can be fulfilled. A breach will result in liability for disciplinary action and, potentially, negligence.

Key Term: Law Society’s Code for Completion by Post (‘the Code’)
A framework under which the seller’s solicitor acts as agent for the buyer’s solicitor to complete the transaction, undertakes to send completion documents by first-class post/DX on the day of completion, and holds purchase monies/documents to the buyer’s order until completion is agreed.

Under the Code:

• Purchase monies are sent and held “to the buyer’s order” until completion is agreed.
• On agreement, title deeds and documents are held “to the buyer’s order”.
• The seller’s solicitor undertakes to send completion documents on the same day by first-class post/DX (unless a variation is expressly agreed).
• There is an implied undertaking to carry out specified instructions—so the buyer’s solicitor should set out clearly what is expected (e.g., return of examined deeds from an epitome of title on a sale of part in unregistered land).

Worked Example 1.1

Scenario: The seller’s solicitor agrees to redeem the seller’s mortgage from completion funds and undertakes to provide the buyer’s solicitor with DS1 (evidence of discharge) as soon as it is received from the lender. A week after completion, the buyer’s solicitor has not received DS1 despite repeated requests.

Answer:
The completion undertaking is a binding professional promise by the seller’s solicitor. Failure to forward the DS1 promptly after discharge is a breach, subjecting the solicitor to regulatory sanctions and a claim in damages if the buyer suffers loss. The buyer’s solicitor can insist on compliance and may seek a formal release only when evidence of discharge has been provided.

Post-Completion Matters

After completion, both solicitors have clear responsibilities. The division of tasks is predictable and strictly enforced in practice, and the SQE2 assessment will test your ability to identify and describe these. These steps protect the buyer’s title and any lender’s security and prevent penalties.

Seller’s solicitor (post-completion stage)

• Discharges any existing mortgage (following their undertaking) using DS1 (whole) or DS3 (part) or through Electronic Discharge (ED).
• Forwards evidence of discharge (e.g., DS1/DS3 or confirmation of ED/e-DS1) to the buyer’s solicitor.
• Pays the estate agent’s fees if instructed.
• Accounts to the seller for net proceeds and seeks release of any undertakings once satisfied.

Key Term: DS1
A Land Registry form signed by a lender confirming that a charge over the whole of a registered title has been redeemed.

Key Term: DS3
A Land Registry form confirming that a charge has been discharged over part of a registered title; it must have a plan identifying the released land.

Key Term: Electronic Discharge (ED)
An electronic message submitted by the lender to HM Land Registry to remove a registered charge; confirmation of ED replaces a physical DS1.

Buyer’s solicitor (post-completion stage)

• Submits a Stamp Duty Land Tax (SDLT) return and pays any tax due within 14 days of completion (England). In Wales, Land Transaction Tax (LTT) must be submitted/paid within 30 days.
• Receives the original transfer and discharge evidence and checks for consistency.
• Applies to HM Land Registry for registration of the buyer’s title (AP1 for registered land) within the OS1/OS2 priority period.
• Applies for first registration (FR1) in unregistered land within two months of completion, or risk the transfer being void as regards transfer of the legal estate.
• Registers any new mortgagee’s charge (MR01 at Companies House within 21 days for company borrowers), otherwise the charge may be void against a liquidator/administrator and other creditors.
• Sends the Title Information Document to the client (and lender, if applicable) once received and checks for errors/omissions.

Key Term: SDLT
Stamp Duty Land Tax—a tax due on most transfers of real property in England, usually payable (and return submitted) within 14 days of completion.

Key Term: AP1
Application form to change the register for dispositions of registered titles (e.g., to register a transfer and any new charge).

Key Term: FR1
First Registration application for unregistered land; must be submitted within two months of completion or the transfer becomes void as regards transfer of the legal estate.

Key Term: form DI
Disclosable overriding interests form, used to disclose any overriding interests known to the buyer (e.g., short legal leases).

Worked Example 1.2

Scenario: After completion, the buyer’s solicitor fails to submit the SDLT return within the time limit and then delays the Land Registry application. Several weeks later, the Land Registry refuses to register the buyer’s title due to missing paperwork, and the buyer receives a penalty from HMRC.

Answer:
Delay in the SDLT return exposes the buyer to HMRC penalties and interest. The registration delay risks the buyer being unprotected against third party interests and outside the OS1/OS2 priority period. A lender may require indemnity or reconsider the loan if registration does not occur promptly. Prompt remedial action is needed: pay SDLT, correct deficiencies, and submit the AP1 within the priority period (or explain the lapse and mitigate any intervening entries).

Pre-completion searches and priority periods: the practical link to post-completion

Pre-completion searches are more than a checklist; they create enforceable “windows” within which post-completion applications must be lodged.

• OS1/OS2 priority (registered land) gives 30 working days to submit the AP1 so that the buyer’s application takes priority over any intervening entries.
• K15 Land Charges search (unregistered land) gives 15 working days in which to complete so that the buyer takes free of entries arising until completion.
• Bankruptcy-only K16 is commonly used when acting for lenders funding individuals.
• Company searches have no priority period; they should be done close to completion and again if completion is delayed.

Key Term: contractual compensation
Under the SCs/SCPCs, compensation is payable at the contract rate for late completion. Under the SCs, either party may be liable; under the SCPCs, only the buyer may be liable.

Key Term: notice to complete
A notice that makes time of the essence and gives the defaulting party ten working days to complete. If not complied with, the serving party may rescind and apply remedies (including forfeiture or repayment of deposit with interest depending on who is in default).

Worked Example 1.3

Scenario: The buyer’s solicitor submits an OS1 but forgets to lodge the AP1 within the 30 working day priority period. The seller’s lender registers a new right of way benefiting a neighbouring property during that gap.

Answer:
Missing the OS1 priority window risks the buyer’s registration being subject to intervening entries. If the right of way is validly registrable and lodged during the gap, the buyer may be bound. The buyer’s solicitor should explain the implications, consider whether the right was capable of overriding irrespective of registration, and assess options (e.g., indemnity insurance, negotiation, or challenge). The lesson is to ensure AP1 is submitted within the OS1 priority period.

Date, Time, Place of Completion and the Code

If no completion date is set on exchange, the default is 20 working days after the contract date (SC 6.1.1 and SCPC 9.1.1). Completion time is 2 p.m. unless varied by special condition (SC 6.1.2 and SCPC 9.1.2). Completion usually takes place at the seller’s solicitor’s office (SC 6.2.2 and SCPC 9.2.2) or by adopting the Code. Where the Code is used, the seller’s solicitor undertakes to post/dx the completion documents on the day of completion and holds monies/documents to the buyer’s order until completion is agreed.

Key Term: AP1
Application to change the register; must be used to register a transfer and a new charge on a registered title within the OS1/OS2 priority period.

Remedies for Late Completion, Penalties, and Professional Responsibilities

If completion does not occur on the scheduled date (or is delayed late in the day), there can be contractual penalties, including daily interest and, following a notice to complete, possible rescission or forfeiture of the deposit. These are governed by the contract and the standard conditions of sale. Under SCs, either party can be liable for contractual compensation for delay; under SCPCs, only the buyer may be liable.

A party ready, willing, and able to complete may serve a notice to complete, making time of the essence and giving ten working days to complete. Failure leads to options to rescind, forfeiture/tender of deposit plus interest (depending on which party is in default), and damages. Common law damages may also be claimed, but without double recovery.

Worked Example 1.4

Scenario: The buyer’s funds arrive at 3.20 p.m. on Friday. The seller refuses to treat completion as that day’s completion and serves a notice to complete at 4 p.m. The buyer has paid only a 5% deposit at exchange.

Answer:
Completion is deemed to have taken place on the next working day if funds arrive after 2 p.m. The seller may claim contractual compensation at the contract rate. Once a notice to complete is served, the buyer must immediately top up the deposit to 10% (SC 6.8.3 and SCPC 9.8.3). If the buyer fails to complete within ten working days, the seller may rescind, retain the deposit with interest, and claim damages.

Worked Example 1.5

Scenario: The buyer is a company borrowing to fund the purchase. The buyer’s solicitor registers the transfer but forgets to register the new charge at Companies House within 21 days.

Answer:
Failure to register a company charge within 21 days renders the charge void against a liquidator/administrator and other creditors. The lender’s security is prejudiced. Urgent steps include seeking a court order for late registration (rare and discretionary) or alternative security. The buyer’s solicitor should notify the lender immediately and consider any liability exposure.

Exam Warning

Where undertakings are given for mortgage redemption or document delivery, candidates often overlook the personal liability of the solicitor for breach—both in professional discipline and damages liability, regardless of client’s instructions.

File Closing, Document Retention, and Notifications

Once registration is confirmed and all obligations are discharged, solicitors inform their respective clients and close their files. The buyer’s solicitor should provide the Title Information Document and copies of all completed paperwork to the client (and lender, if applicable), confirm any restrictions/charges registered as intended, and retain evidence of SDLT/LTT submission and completion of registration. The seller’s solicitor ensures the proceeds are delivered and retains proof of mortgage discharge and professional undertakings having been met.

Revision Tip

Maintain a post-completion checklist: SDLT/LTT submission; AP1/FR1 lodged and within priority periods; Companies House registration (if applicable); DS1/DS3/ED received and forwarded; Title Information Document checked and supplied to client/lender; undertakings formally released.

Summary

Efficient completion and post-completion are critical for legal transfer of ownership, discharge of all existing charges, and registration of the buyer’s title. Delays or failures at any step risk financial penalties, client losses, and professional discipline. Anticipate and resolve any issues proactively, maintain strict compliance with undertakings, and follow all SDLT/LTT and Land Registry deadlines. Remember the differing priority periods for OS1/OS2 and Land Charges searches and the consequences of missing them. Apply the Code accurately when completing by post and protect the lender’s security by timely registration of any company charge.

Key Point Checklist

This article has covered the following key knowledge points:

• The standard sequence and procedures at completion in a freehold sale.
• The binding and enforceable nature of completion undertakings, including common forms and risks of breach.
• Seller’s and buyer’s solicitors’ distinct post-completion responsibilities.
• Critical forms and deadlines: DS1, DS3, SDLT/LTT, AP1, FR1, Companies House MR01.
• The Law Society’s Code for Completion by Post: agency role, undertakings, and document dispatch.
• The registration gap in registered land and how OS1/OS2 priority protects the buyer’s application.
• Remedies for late completion: contractual compensation, notice to complete, rescission, and damages.
• The importance of precise documentation, priority management, and client/lender notification at the end of the process.

Key Terms and Concepts

• completion
• completion undertaking
• DS1
• DS3
• SDLT
• Law Society’s Code for Completion by Post (‘the Code’)
• OS1/OS2
• AP1
• FR1
• form DI
• Electronic Discharge (ED)
• contractual compensation
• notice to complete