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

Learning Outcomes

After working through this article, you will be able to clearly explain the practical and legal steps involved in completion and post-completion for a typical freehold real estate transaction. You will understand standard undertakings, key documentation, the division of responsibilities between seller’s and buyer’s solicitors, and common mistakes to avoid. You will confidently apply this knowledge to SQE2 scenarios and accurately tackle exam-style questions on this key procedural topic.

SQE2 Syllabus

For SQE2, you are required to understand completion and post-completion in freehold law and practice from a practical and procedural standpoint. This includes the ability to:

• Outline the typical completion and post-completion stages in freehold conveyancing.
• Identify required documentation and standard completion undertakings.
• Distinguish the pre-completion checks and actions of seller’s and buyer’s solicitors.
• Explain how post-completion formalities are handled, including stamp duty and registration.
• Recognise common exam pitfalls and the practical consequences of errors.

As you work through this article, prioritise in your revision:

• 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.

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.

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 – Typical Steps and Sequence

Seller’s solicitor (completion stage)

• Confirms receipt of completion money from the buyer’s solicitor.
• Releases keys to the buyer.
• 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.

Key Term: completion undertaking
A binding 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.
• Obtains the transfer deed, keys, and evidence of discharge of any seller’s mortgage.
• Checks the documents received match those agreed in the pre-completion stage.
• Holds the funds to the seller’s solicitor’s order until completion is confirmed.

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. 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 even professional negligence.

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.

Post-Completion Matters

After completion, both solicitors have clear responsibilities. The division of tasks is predictable and often strictly enforced in practice, and the SQE2 assessment will test your ability to identify and describe these.

Seller’s solicitor (post-completion stage)

• Discharges any existing mortgage (following their undertaking).
• Forwards evidence of discharge (e.g., DS1 for registered land) to the buyer’s solicitor.
• Pays the estate agent’s fees if instructed.
• Accounts to the seller for net proceeds.

Buyer’s solicitor (post-completion stage)

• Submits a Stamp Duty Land Tax (SDLT) return and pays any tax due, within the statutory deadline (ordinarily 14 days after completion).
• Receives the original transfer and discharge evidence.
• Applies to HM Land Registry for registration of the buyer’s title (using the correct form, e.g., AP1 for registered land), also within statutory deadlines and the priority period of any pre-completion search.
• Registers any new mortgagee’s charge where lending is involved.
• Retains copies of all critical documents.

Key Term: DS1
A Land Registry form signed by a lender confirming that a charge on registered land has been redeemed.

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

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 can put the buyer at risk of being unprotected against third party interests, and a mortgage lender may withdraw funds or require indemnity if the transaction is not properly registered within the agreed priority period.

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.

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 Land Registry title information document and copies of all completed paperwork to the client (and lender, if applicable). The seller’s solicitor ensures the proceeds are delivered and retains proof of mortgage discharge and professional undertakings having been met.

Revision Tip

Always summarise, in a post-completion checklist, what remains outstanding. Ensure all mortgage redemptions, discharges, and registrations are documented, and remind clients of the importance of retention of their title information from the Land Registry.

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 and Land Registry deadlines.

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, SDLT return, Land Registry application.
• The professional and legal consequences of errors, omissions, or delays in post-completion steps.
• The importance of precise documentation and client notification at the end of the process.

Key Terms and Concepts

• completion
• completion undertaking
• DS1
• SDLT