The Standard Conditions of Sale

The Standard Conditions of Sale

An overview of the Standard Conditions of Sale (SCS).This note contains links to a collection of practice notes on the fourth edition of the SCS.Please note: no online version of the SCS is available from PLC Property.The SCS are published by OyezStraker, Oyez House, 7 Spa Road, London SE16 3QQ, telephone 0845 0175517. The SCS are also printed in the Law Societys Conveyancing Handbook. Unfortunately, PLC Property is not authorised to provide access to an online version.
Reference: www.practicallaw.com/0-380-9517

Introduction
The Standard Conditions of Sale (SCS) are a set of standard conditions to be incorporated into a contract for sale or a contract for the grant of a lease. The SCS are typically used in contracts relating to residential property but may also be used for some straightforward commercial property transactions (see Standard Commercial Property Conditions). The SCS are published by OyezStraker, Oyez House, 7 Spa Road, London SE16 3QQ, telephone 0845 0175517. There is no access to an online version of the SCS from PLC Property. The SCS are part of a printed form containing a contract for sale on the front and back pages, with the text of the SCS set out in full on the inside pages. If a transaction is straightforward and requires very few amendments or additions to the SCS, it is possible to use the printed form. For further information, see Using the printed form of the SCS (Fourth Edition). In practice, however, conveyancers tend to use a contract prepared on their own word processing system which incorporates the SCS by reference. This may be more convenient than deleting the inapplicable options and adding text onto the printed form. National Conveyancing Protocol The Law Society introduced the National Conveyancing Protocol (the Protocol) in 1990 to speed up the conveyancing of residential property. Its aim was to provide the buyers solicitor with all necessary legal information as soon as possible after acceptance of an offer. The Protocol is currently in its fifth edition. However, it does not take into account: The Solicitors Code of Conduct 2007 (see Practice note, Solicitors Code of Conduct 2007). Home Information Packs (HIPs). Note: On 21 May 2010, the Home Information Pack (Suspension) Order (SI 2010/1455) suspended the requirement for Home Information Packs (HIPs) with immediate effect. Primary legislation will be required to permanently abolish HIPs. Sellers are still required to commission energy performance certificates (EPCs) before marketing their properties. See Practice note, Energy performance certificates.
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For further information, see: Legal update, DCLG announcement: HIPs suspended but EPCs retained; and Legal update, Statutory instruments suspending HIPs and amending EPC regulations. PLC Property will remove the bullet point above when HIPs have been formally abolished. The TransAction forms that were introduced from 1 August 2007 (see Legal update, Revised TransAction forms). Note that the TransAction forms have since been further amended. For links to specimen copies of the current TransAction forms, see Law Society news release: Changes to TransAction forms (19 March 2009). The residential conveyancing process (including the Protocol) is currently under review by the Law Society (see Legal update, Law Society consultation: changes to the residential conveyancing system). Where the parties to a conveyancing transaction agree to use the Protocol, they should use the SCS as the basis of the contract. While recognising that it is for the parties to decide on the terms of the contract, the Protocol recommends that variations and additions to the SCS are kept to a minimum.

SCS (Fourth Edition)

The Fourth Edition of the SCS took effect on 13 October 2003, coinciding with the date that the Land Registration Act 2002 came into force (see Legal update, Revised Standard Conditions of Sale (Fourth Edition)). Explanatory notes are available (see Standard Conditions of Sale (4th edition) - explanatory notes (Law Society)). The SCS (Fourth Edition) forms the 24th edition of the National Conditions of Sale and the 2003 edition of the Law Societys Conditions of Sale. The following matters are covered by the SCS (Fourth Edition): General (SCS 1, Fourth Edition) For detailed information, see Practice note, SCS 1: General (Standard Conditions of Sale, Fourth Edition). SCS 1 covers the following areas: Definitions (SCS 1.1). Joint parties (SCS 1.2). Notices and documents (SCS 1.3). VAT (SCS 1.4). Assignment (SCS 1.5). Formation (SCS 2, Fourth Edition)
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For detailed information, see Practice note, SCS 2: Formation (Standard Conditions of Sale, Fourth Edition). SCS 2 covers the following areas: Date (SCS 2.1). Deposit (SCS 2.2). Auctions (SCS 2.3). Matters affecting the property (SCS 3, Fourth Edition) For detailed information, see Practice note, SCS 3: Matters affecting the property (Standard Conditions of Sale, Fourth Edition). SCS 3 covers the following areas: Freedom from incumbrances (SCS 3.1). Physical state (SCS 3.2). Leases affecting the property (SCS 3.3). Retained land (SCS 3.4). Title and transfer (SCS 4, Fourth Edition) For detailed information, see Practice note, SCS 4: Title and transfer (Standard Conditions of Sale, Fourth Edition). SCS 4 covers the following areas: Proof of title (SCS 4.1). Requisitions (SCS 4.2). Timetable (SCS 4.3). Defining the property (SCS 4.4). Rents and rentcharges (SCS 4.5). Transfer (SCS 4.6). Pending completion (SCS 5, Fourth Edition) For detailed information, see Practice note, SCS 5: Pending completion (Standard Conditions of Sale, Fourth Edition). SCS 5 covers the following areas: Responsibility for property (SCS 5.1). Occupation by buyer (SCS 5.2). Completion (SCS 6, Fourth Edition)
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For detailed information, see Practice note, SCS 6: Completion (Standard Conditions of Sale, Fourth Edition). SCS 6 covers the following areas: Date (SCS 6.1). Arrangements and place (SCS 6.2). Apportionments (SCS 6.3). Amount payable (SCS 6.4). Title deeds (SCS 6.5). Rent receipts (SCS 6.6). Means of payment (SCS 6.7). Notice to complete (SCS 6.8). Remedies (SCS 7, Fourth Edition) For detailed information, see Practice note, SCS 7: Remedies (Standard Conditions of Sale, Fourth Edition). SCS 7 covers the following areas: Errors and omissions (SCS 7.1). Rescission (SCS 7.2). Late completion (SCS 7.3). After completion (SCS 7.4). Buyers failure to comply with notice to complete (SCS 7.5). Sellers failure to comply with notice to complete (SCS 7.6). Leasehold property (SCS 8, Fourth Edition) For detailed information, see Practice note, SCS 8: Leasehold property (Standard Conditions of Sale, Fourth Edition). SCS 8 covers the following areas: Existing leases (SCS 8.1). New leases (SCS 8.2). Consent (SCS 8.3). Commonhold land (SCS 9, Fourth Edition) For detailed information, see Practice note, SCS 9: Commonhold Land (Standard Conditions of Sale, Fourth Edition).
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Chattels (SCS 10, Fourth Edition) For detailed information, see Practice note, SCS 10: Chattels (Standard Conditions of Sale, Fourth Edition).

Using the printed form of the SCS (Fourth Edition)

Copyright in the SCS is held jointly by the Law Society and Oyez. Conveyancers are permitted to reproduce the contract for sale that appears on the front and back pages of the printed form. However, for copyright reasons, the actual text of the SCS cannot be reproduced and should be incorporated by reference. Front page The front page of the printed form provides for the parties to insert details of the following: Date. The parties conveyancers will normally insert the date of the contract in manuscript on exchange of contracts. Seller. The full name(s) and address(es) of the seller should be added here. If the seller is a company, it is advisable to give the companys registered number. Buyer. The full name(s) and address(es) of the buyer should be added here. If the buyer is a company, it is advisable to give the companys registered number. Property. The person preparing the contract should: insert the address of the property; and state whether the property is freehold or leasehold.

Title number/root of title. Details of the sellers title should be inserted here. If the property is: registered, this will be the title number(s) of the property; unregistered, this will be a description of the root document.

Specified incumbrances. The sale is made subject to any incumbrances specified in the contract by virtue of SCS 3.1.2(a). The person preparing the contract should: (for registered properties) refer to the relevant entries on the title register; or (for unregistered properties) specify the incumbrances and the documents they are contained in. See also Practice note, SCS 3: Matters affecting the property (Standard Conditions of Sale, Fourth Edition). Title guarantee. The printed form allows the seller to: specify whether the seller will transfer the property with full or limited title guarantee; and
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add any further modifications to the title guarantee that may be necessary. The title guarantee on the front page of the printed form should be read together with SCS 4.6.2 and any special conditions (including special condition 2 on the back page of the printed form). For more information, see Practice note, SCS 4: Title and transfer (Standard Conditions of Sale, Fourth Edition).

Completion date. This is the contractual completion date. The parties conveyancers will normally insert the completion date in manuscript on exchange of contracts. For more information, see Practice note, SCS 1: General (Standard Conditions of Sale, Fourth Edition): Completion date (SCS 1.1.1(d)). Contract rate. In the absence of an express provision, the contract rate is the Law Societys interest rate. For more information, see Practice note, SCS 1: General (Standard Conditions of Sale, Fourth Edition): Contract rate (SCS 1.1.1(e)). Purchase price. This is the price payable for the property and excludes any separate amount that is payable for chattels. Deposit. This may be left blank until exchange as the parties may not have finalised the amount of the deposit before then. For information about deposits, see Practice note, SCS 2: Formation (Standard Conditions of Sale, Fourth Edition): Deposit (SCS 2.2). Chattels price. This is the separate amount (if any) payable for chattels. This may be left blank until exchange as the parties may still be negotiating this when the contract is drafted. For more information, see Practice note, SCS 1: General (Standard Conditions of Sale, Fourth Edition): Chattels price (SCS 1.1.1(b)). Balance. The term "balance" is not actually used in the SCS but is included in the printed form so that the parties can easily see the amount payable on completion. The balance is calculated as the purchase price plus the chattels prices less the deposit. It does not reflect, for example, any apportionments which may be payable on completion. For more information, see Practice note, SCS 6: Completion (Standard Conditions of Sale, Fourth Edition): Amount payable (SCS 6.4). Sale and purchase The front page of the printed form includes the operative sale and purchase wording:

"The seller will sell and the buyer will buy the property for the purchase price."
Signing the contract There is a box on the front page of the printed form for the seller/buyer to sign the contract, as applicable. This appears next to a warning that states:

"This is a formal document, designed to create legal rights and legal obligations. Take advice before using it."
If logistics make it impracticable for the client to sign the contract itself, it is acceptable for the clients conveyancer to sign on the clients behalf, but only if the conveyancer has the clients express authority to do so (Suleman v Shahsavari [1989] 2 All ER 460).
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To minimise the risk of being liable in damages for breach of warranty of authority, conveyancers should not sign a contract on behalf of their clients unless they have express authority in one of the following forms: A power of attorney. The conveyancer should check that the extent and scope of the power is adequate for this purpose. For more information, see Practice note, Powers of attorney. The clients authority in writing. Prior to getting the authority, the conveyancer should ensure that the client has understood the transaction and the implications of the contract being signed on its behalf. The other partys conveyancer should request evidence of the agents authority to sign (see Legal update, Must an authority to sign a land sale contract on the sellers behalf be in writing?). Back page The following special conditions are set out on the back page of the printed form: Special condition 1

"1. (a) This contract incorporates the Standard Conditions of Sale (Fourth Edition).1. (b) The terms used in this contract have the same meaning when used in the Conditions."
See Practice note, SCS 1: General (Standard Conditions of Sale, Fourth Edition) for information on: The application of the SCS. The definitions used in the SCS. Special condition 2

"2. Subject to the terms of this contract and to the Standard Conditions of Sale, the seller is to transfer the property with either full title guarantee or limited title guarantee, as specified on the front page."
For information on title guarantees, see Practice note, SCS 4: Title and transfer (Standard Conditions of Sale, Fourth Edition). Special condition 3

"3. The chattels which are on the property and are set out on any attached list are included in the sale and the buyer is to pay the chattels price for them."
For information on: The meaning of chattels price, see Practice note, SCS 1: General (Standard Conditions of Sale, Fourth Edition): Chattels price (SCS 1.1.1(b)). Provisions in the SCS relating to chattels, see Practice note, SCS 10: Chattels (Standard Conditions of Sale, Fourth Edition).
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Special condition 4

"4. The property is sold with vacant possession(or) 4. The property is sold subject to the following leases or tenancies:"
The person drafting the contract should delete the option in special condition 4 which does not apply. Where applicable, details of any leases or tenancies affecting the property should be included on the back page. Where the seller agrees to give vacant possession, the seller must, before completion, procure the cancellation of any charge registered by a non-owning spouse or civil partner under section 31 of the Family Law Act 1996 or section 2 of the Land Charges Act 1972 (paragraph 3, Schedule 4, Family Law Act 1996). For more information on: Cancelling a spouse or civil partners home rights under the Family Law Act 1996, see LR Practice Guide 20 - Applications under the Family Law Act 1996. The meaning of vacant possession generally, see Practice note, Selling with vacant possession. Any further special conditions (including any variations to, or exclusions of, the SCS) should be added after special condition 4. For example special conditions of sale for use in a contract for the sale of residential freehold land with vacant possession, see Practice note, Special conditions of sale for residential freehold land (vacant possession). Contact details for the parties conveyancers should be inserted on the back page of the printed form. If e-mail addresses are included in the contract, this signals that the parties accept service by e-mail (SCS 1.3.3(b)). For more information, see Practice note, SCS 1: General (Standard Conditions of Sale, Fourth Edition): Notices and documents (SCS 1.3).

Standard Commercial Property Conditions

The SCS are intended primarily for use in residential sales and in the sale of small business premises. For more complex commercial transactions, the Standard Commercial Property Conditions (SCPC) will generally be more appropriate than the SCS. The SCPC were originally based on the third edition of the SCS but were designed to reflect standard practice in commercial property transactions. A second edition of the SCPC became available for use from 1 June 2004. Reasons for choosing the SCPC instead of the SCS for a particular transaction might include the following: The SCPC include more detailed provisions relating to leases. These may be helpful to clarify how the parties should, for example: handle any applications for consent submitted by any of the sellers tenants; or deal with any outstanding rent reviews.

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The Standard Conditions of Sale

The SCPC contain different options to cater for various tax positions. For example, unlike the SCS, the SCPC include specific provisions for use: where the sale is to be treated as a transfer of a going concern; and where the buyer intends to make a claim under the Capital Allowances Act 2001.

For more information on the SCPC, see Practice note, The Standard Commercial Property Conditions.

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The Standard Conditions of Sale

Article Information
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Article ID: 0-380-9517 Document Generated: 03-Jun-2010 15:38:31

Jurisdiction

England http://www.practicallaw.com/topic9-103-0624 Wales http://www.practicallaw.com/topic4-103-1070

Subject

Contracts and deeds: land and buildings http://www.practicallaw.com/topic4-103-1310 Conveyancing procedure http://www.practicallaw.com/topic8-103-2082
References

Statutory instruments suspending HIPs and amending EPC regulations (http://www.practicallaw.com/0-502-3384) SCS 10: Chattels (Standard Conditions of Sale, Fourth Edition) (http://www.practicallaw.com/1-380-9550) The Standard Commercial Property Conditions (http://www.practicallaw.com/2-107-3787) SCS 4: Title and transfer (Standard Conditions of Sale, Fourth Edition) (http://www.practicallaw.com/2-381-2788) Powers of attorney (http://www.practicallaw.com/3-107-4654) Energy performance certificates (http://www.practicallaw.com/3-259-4960) SCS 3: Matters affecting the property (Standard Conditions of Sale, Fourth Edition) (http://www.practicallaw.com/3-381-1986) SCS 7: Remedies (Standard Conditions of Sale, Fourth Edition): Errors and omissions (SCS 7.1) (http://www.practicallaw.com/3-382-5120) Land Registration Act 2002 (http://www.practicallaw.com/4-106-5140) SCS 6: Completion (Standard Conditions of Sale, Fourth Edition): Date (SCS 6.1) (http://www.practicallaw.com/4-382-4276) Must an authority to sign a land sale contract on the seller's behalf be in writing? (http://www.practicallaw.com/4-385-5244)

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The Standard Conditions of Sale

Selling with vacant possession (http://www.practicallaw.com/5-101-5748) DCLG announcement: HIPs suspended but EPCs retained (http://www.practicallaw.com/5-502-3254) SCS 8: Leasehold property (Standard Conditions of Sale, Fourth Edition) (http://www.practicallaw.com/6-382-2894) SCS 5: Pending completion (Standard Conditions of Sale, Fourth Edition): Responsibility for property (SCS 5.1) (http://www.practicallaw.com/6-382-4275) LR Practice Guide 20 - Applications under the Family Law Act 1996 (http://www.practicallaw.com/7-106-6727) Solicitors' Code of Conduct 2007 (http://www.practicallaw.com/7-367-9961) SCS 2: Formation (Standard Conditions of Sale, Fourth Edition) (http://www.practicallaw.com/7-380-9552) SCS 9: Commonhold Land (Standard Conditions of Sale, Fourth Edition) (http://www.practicallaw.com/7-380-9613) Special conditions of sale for residential freehold land (vacant possession) (http://www.practicallaw.com/7-384-0982) Law Society consultation: changes to the residential conveyancing system (http://www.practicallaw.com/7-386-6000) Standard Conditions of Sale (4th edition) - explanatory notes (Law Society) (http://www.practicallaw.com/8-106-6784) Revised TransAction forms (http://www.practicallaw.com/8-374-3042) Law Society news release: Changes to TransAction forms (19 March 2009) (http://www.practicallaw.com/8-385-5973) The Home Information Pack (Suspension) Order (SI 2010/1455) (http://www.practicallaw.com/8-502-3356) Revised Standard Conditions of Sale (Fourth Edition) (http://www.practicallaw.com/9-107-1681) SCS 1: General (Standard Conditions of Sale, Fourth Edition) (http://www.practicallaw.com/9-380-9551) SCS 6: Completion (Standard Conditions of Sale, Fourth Edition) (http://www.practicallaw.com/A:42651863) SCS 7: Remedies (Standard Conditions of Sale, Fourth Edition) (http://www.practicallaw.com/A:42722982)

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SCS 5: Pending completion (Standard Conditions of Sale, Fourth Edition) (http://www.practicallaw.com/A:44810995)

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