ANSWERS AND JUSTIFICATIONS Q1 Correct answer: C A The Financial Services Authority definition of a regulated mortgage contract includes a requirement that at least 40% of the land is used, or is intended to be used as, or in connection with, a dwelling by the borrower, or the relative of the borrower. B The Financial Services Authority definition of a regulated mortgage contract includes a requirement that at least 40% of the land is used, or is intended to be used as, or in connection with, a dwelling by the borrower, or the relative of the borrower. C The Financial Services Authority definition of a regulated mortgage contract includes a requirement that at least 40% of the land is used, or is intended to be used as, or in connection with, a dwelling by the borrower, or the relative of the borrower. D The Financial Services Authority definition of a regulated mortgage contract includes a requirement that at least 40% of the land is used, or is intended to be used as, or in connection with, a dwelling by the borrower, or the relative of the borrower. Q2 Correct answer: D A Henry’s property is a holiday home in France. The FSA definition for regulated mortgage contracts only includes properties in the United Kingdom nut not timeshare property. B Paul’s property is a timeshare which is specifically excluded from the FSA definition of a regulated mortgage contract, as are overseas properties. C Both timeshares and overseas properties are excluded from the FSA definition of a regulated mortgage contract. D Both timeshares and overseas properties are excluded from the FSA definition of a regulated mortgage contract. Q3 Correct answer: C A The MCOB Rules are applied to the FSA definition of regulated mortgage products which require at least 40% of the land is used, or is intended to be used as, or in conjunction with, a dwelling by the borrower or a relative of the borrower. B The MCOB Rules are applied to the FSA definition of regulated mortgage products which require at least 40% of the land is used, or is intended to be used as, or in conjunction with, a dwelling by the borrower or a relative of the borrower. C The MCOB Rules are applied to the FSA definition of regulated mortgage products which
require at least 40% of the land is used, or is intended to be used as, or in conjunction with, a dwelling by the borrower or a relative of the borrower. DThe MCOB Rules are applied to the FSA definition of regulated mortgage products which require at least 40% of the land is used, or is intended to be used as, or in conjunction with, a dwelling by the borrower or a relative of the borrower. Q4 Correct answer: D A Regulated mortgage status applies to contracts entered into after 31st October 2004, subject to other criteria. These criteria can include bridging loans. B Regulated mortgage status applies to contracts entered into after 31st October 2004, subject to other criteria. These criteria can include debt consolidation. C Regulated mortgage status applies to contracts entered into after 31st October 2004, subject to other criteria. These criteria can include home improvement loans. D Regulated mortgage status applies to contracts entered into after 31st October 2004, subject to other criteria. These criteria relates specifically to first mortgages, therefore second charges are excluded. Q5 Correct answer: B A An estate agent can advise both the vendor and the purchaser on areas where no conflict exists. B An estate agent is usually paid on a commission basis, expressed as a percentage of the sale price or a flat fee. C The estate agent is the agent of the vendor not the purchaser. D Property visits by prospective purchasers need not be in the company of the estate agent. Q6 Correct answer: B A Covenants are imposed by previous owners, not the Land Registry. B Covenants are passed on to all subsequent purchasers of the land, which remains subject to them. C An easement, not covenant, is a right one person has over the property of another. D Covenants are said to ‘run with land’, not ‘run with the buyer’. Q7 Correct answer: B A The estate agent acts as an agent of the vendor, not the purchaser. B The estate agent acts as an agent of the vendor, not the purchaser.
C It is traditional for an estate agent to charge a lower, not higher, commission when acting as a sole agent. D Although most estate agent transactions are based on a commission based on the sale price, there is no bar on charging a fee whether or not the property is sold. Q8 Correct answer: D A This would be ‘good leasehold’ title. Possessory title has the effect of guaranteeing good title from the point of the property’s first registration but not before. B The land could be either freehold or leasehold when possessory title applies. C ‘Qualified’ title would apply where there is a defect in the title, in which case good title could not apply. Possessory title has the effect of guaranteeing good title from the point of the property’s first registration. D Possessory title is commonly in place where some or all of the property’s title deeds are missing when a property is first registered. Possessory title has the effect of guaranteeing good title from the point of the property’s first registration but not before. Q9 Correct answer: C A The proprietorship register sets out the class of title. The property register details the plan of the land. B The proprietorship register sets out the class of title. Easements which are beneficial to the property will be included in the property register. C The proprietorship register sets out the class of title. D The proprietorship register sets out the class of title. The property register will include the title number. Q10 Correct answer: B A Although it is unusual, easements can insist that the owner does something - a positive burden. B An easement attaches to, and is for the benefit of the land, and the two plots must be close to each other. C As the easement attaches to the land rather than the owner, it is not something which can be passed to another owner. D Although it is relatively rare the courts do have the power to remove easements such as right of way.
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mortgage introducer JULY 2010 43
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