SQE1 · Subject page 8 · 6 min read

Property Practice

SQE1 FLK2 subject notes: freehold conveyancing from instructions to registration, commercial leases, business tenancies under the 1954 Act, planning basics and property tax, with the conduct points that run through them.

What this subject covers

Property Practice is the conveyancing half of FLK2. The SRA specification groups it into four areas:

Freehold transactions: taking instructions, investigating title (registered and unregistered), pre-contract searches and enquiries, the contract (Standard Conditions of Sale and Standard Commercial Property Conditions), exchange, pre-completion steps, completion, post-completion and remedies for delay.
Leasehold practice: the content of a commercial lease (repair, insurance, alterations, user, rent review, alienation), the grant and assignment of leases, licences to assign, liability on covenants, remedies and termination.
Business tenancies: security of tenure under Part II of the Landlord and Tenant Act 1954.
Planning and tax: what counts as development, enforcement, building regulations, Stamp Duty Land Tax (and Land Transaction Tax in Wales), VAT on property and capital gains tax main residence relief.

Ethics is examined throughout: conflicts when acting for more than one party, undertakings, money laundering and acting for lenders. Solicitors Accounts questions often arise in a conveyancing setting.

Key principles

Title and searches

Registered land: the buyer relies on official copies of the register and title plan. The register has three parts: property, proprietorship and charges. Overriding interests (Schedule 3 to the Land Registration Act 2002) bind without being on the register, so the buyer still inspects and asks about occupiers.
Unregistered land: the seller must show a good root of title at least 15 years old (Law of Property Act 1969, s 23). A conveyance on sale is the best root. The buyer searches the Land Charges register against the names of every estate owner in the title.
Pre-contract searches: the local authority search with CON29 enquiries (planning, roads, notices), a drainage and water search, an environmental search, and others the location calls for (coal mining, commons, chancel repair). Pre-contract enquiries use the Law Society forms for residential sales (TA6 and TA10) or the Commercial Property Standard Enquiries.

Contract and exchange

A contract for the sale of land must be in writing, contain all the agreed terms and be signed by or for each party (Law of Property (Miscellaneous Provisions) Act 1989, s 2).
Under the Standard Conditions of Sale the deposit (normally 10 per cent) is held by the seller's conveyancer as stakeholder, unless used towards a deposit on the seller's related residential purchase. The seller keeps the risk of physical damage until completion, and the buyer may rescind if the property becomes unusable for its purpose.
Exchange is normally by telephone under Law Society Formulae A, B or C: A where one solicitor holds both signed parts, B where each holds its own client's part, C for chains.

Completion and after

Before completion the buyer's solicitor makes an official search with priority (OS1), which gives 30 working days' priority, and, if acting for a lender, a bankruptcy search against each individual borrower.
Completion is usually by bank transfer under the Law Society Code for Completion by Post, under which the seller's solicitor acts as the buyer's solicitor's agent without charge.
After completion: the SDLT return is filed and tax paid within 14 days of the effective date; the transfer is registered within the priority period; the seller's solicitor discharges the seller's mortgage under its undertaking and sends the evidence (form DS1 or an electronic discharge).

Delay

Under the Standard Conditions, a party who delays pays compensation at the contract rate on the price (less any deposit, where the buyer is the payer) for the period of its default.
Either party who is ready, able and willing may serve a notice to complete, making time of the essence: completion must then take place within ten working days, excluding the day of service. A seller whose buyer fails to comply may rescind, keep the deposit and resell.

Leases and the 1954 Act

Leases granted on or after 1 January 1996 are governed by the Landlord and Tenant (Covenants) Act 1995: a tenant is released on a lawful assignment, but may be required to give an authorised guarantee agreement for its immediate assignee only.
A qualified covenant against assignment cannot be unreasonably withheld (Landlord and Tenant Act 1927, s 19), and the landlord must decide within a reasonable time and give written reasons (Landlord and Tenant Act 1988, s 1).
A protected business tenant may stay on at the end of the term. The landlord ends the tenancy by a section 25 notice (6 to 12 months); the tenant may request a new tenancy under section 26, and a landlord who wants to oppose must serve a counter-notice within two months. The grounds of opposition are in section 30(1); ground (g) (own occupation) is not available to a landlord who bought within the last five years.
Contracting out needs a warning notice and a tenant's declaration: a simple declaration if the notice was served at least 14 days before the tenant is bound, otherwise a statutory declaration.

Planning and tax

Development is building, engineering, mining or other operations, or a material change of use (Town and Country Planning Act 1990, s 55). A change within the same use class is not development.
VAT: the grant of a lease or sale of an older commercial building is normally exempt; an owner may opt to tax so that it can recover input tax, after which rents and the sale price are standard-rated. The sale of a new commercial building (under three years old) is standard-rated.
Main residence relief exempts the gain on a home that has been the owner's only or main residence throughout ownership, with grounds up to half a hectare.

Conduct points

Acting for buyer and seller is not normally possible: their interests conflict and neither exception in paragraph 6.2 of the SRA Code of Conduct for Solicitors fits.
Acting for buyer and lender is common on standard terms, but if the buyer asks the solicitor to hide material information from the lender, the solicitor must seek consent to disclose and otherwise stop acting for both (paragraphs 6.3 and 6.4).
Undertakings are personal obligations and must be performed (paragraph 1.3), even if the client fails to provide the funds.
Money laundering: unexplained third-party or overseas funds call for a report to the firm's money laundering reporting officer, no further steps without consent, and no tipping off (Proceeds of Crime Act 2002, ss 328, 333A).

Worked example

Asha is buying a freehold house for her own occupation with a mortgage. The seller's title is registered. Contracts are exchanged under Formula B with completion fixed for 20 March.

On 12 March Asha's solicitor obtains an OS1 search result (priority for 30 working days) and a bankruptcy search against Asha for the lender.
Asha's funds arrive three working days late. Under the Standard Conditions she owes the seller compensation at the contract rate on the price less her deposit, for three days.
On completion the seller's solicitor gives the usual undertaking to discharge the seller's mortgage.
Within 14 days Asha's solicitor files the SDLT return and pays the tax, then applies to register the transfer and Asha's lender's charge before the priority period ends, enclosing the seller's discharge when received.

The likely exam angle: which step protects Asha if a third party applies to register an entry between the search and registration? The answer is the priority given by the official search, provided the application reaches HM Land Registry in time.

Scope follows the SRA's SQE1 Functioning Legal Knowledge Assessment Specification (FLK2, Property Practice). The notes are our own summary, not SRA material. Law of England and Wales as at 1 September 2026 (the SRA assesses the law as it stands four calendar months before the first assessment in a window).