Rudy wants to purchase a townhouse within the city. The sale agreement includes a covenant that the transaction is subject to Rudy obtaining a banking facility of which is 50% of the balance of the purchase price. Clyde Bank Ltd has agreed to advance Rudy this balance on the security of a first legal charge on the property. Both Rudy and Clyde Bank Ltd instruct you to act for them. The townhouse had been bought by Roe Ltd and they hold a leasehold title of 99 years registered under the Registered Land Act. Trump I-LP represents roe for purposes of the transactions.
- Outline the procedure you will follow to ensure the security in favor of Clyde Bank Ltd is registered successfully. (10 marks)
- How would you ensure that stamp duty and capital gains tax are paid in the transaction and what are the consequences of non-payment of stamp duty? (4 marks)
- Outline the process of payment of conveyance-related taxes (stamp duty, land rent, and land rates). (6 marks)
[An assumption is to be made that the value of the property as agreed between Rudy and Roe Ltd and the time-line is January 2017]Conveyancing-1