The Gazette 1986

GAZETTE

JANUARY/FEBRUARY 1986

Practice Notes Closing a Sale by Post

Solicitors shall be entitled to release to the Vendor the purchase monies. ( 0 After completion and until posting or other dispatch, the Vendor's Solicitor holds the documents of title and other items to close as Agent for the Purchaser's Solicitor, (g) As soon as possible after completion, the Vendor's Solicitor shall send to the Purchaser's Solicitor by reg- istered post or as agreed the documents and other items and the keys (or an authority to the Auctioneers to release these) if they have not been made available on a telephone or telex instruction after completion is deemed to have taken place. The documents and items are sent by registered post or as agreed at the sole risk of the Purchaser's Solicitor. VAT on Management Charges f or Of f i ce and Shop Properties The Irish Auctioneers and Valuers Institute have kindly supplied a copy of a letter clarifying the position with regard to the above, which may be of interest to members. Dear Sir, I refer to our recent discussion and confirm that, having regard to the special features of the application of VAT to property, the Revenue Commissioners are prepared, as a concession, to agree to the following arrangements for the transmission to VAT-registered lessees of a deduction for VAT charged on these goods and services. (1) A landlord who is not registered for VAT and who is not obliged to register may seek the agreement of his Inspector of Taxes (VAT) to become registered by concession. The application should be made by letter to the Inspector and should give the address(es) of the property(ies), a list of the registered tenants, the accounting year/s and quote the registered VAT number of the landlord, if already registered. On being satisfied regarding the circumstances of the case the Inspector will register the landlord. A landlord whom and Inspector agrees to register will be allocated a VAT number which will enable the landlord to issue to his registered lessees once a year, directly or through his management agents, invoices bearing this number and showing VAT, where appropriate. Such invoices will enable the registered lessees to take a deduction for the VAT invoiced, subject to the usual conditions. (2) Landlords who are registered for VAT in accordance with the procedure described above will have the same obligations as persons who are obliged to be registered. They will, therefore, be obliged to keep records in sufficient detail to enable their VAT returns to be checked and validated. In the following instances their obligations will be somewhat modified, (i) Invoices

A sale of property is normally completed by the Pur- chaser's Solicitor attending the Vendor's Solicitors office. On occasions the Purchaser's Solicitor will elect to close by post. While disclaiming responsibility for any adverse consequences of this practice, the Convey- ancing Committee suggests that, if the sale is to be closed by post, the Vendor's Solicitor can reasonably insist that the sale should be closed in the manner herein set out. The closing procedure, which shall be described as the 1986 Code of Practice for closing sales by post, shall apply only where both Vendor's and Purchaser's solicitors have previously agreed to its operation. The sale shall be closed in the following manner: (a) The Purchaser's Solicitor shall not later than four days prior to the closing date send to the Vendor's Sol- icitor a list of closing requirements (in accordance with the replies to Requisitions on Title and subsequent cor- respondence). (b) When the Vendor's Solicitor is immediately able to satisfy or meet these closing requirements, notice shall be given (and where applicable mortgage redemption figures shall be furnished) to the Purchaser's Solicitor who shall then (save in the circumstances in paragraph (c)> send to the Vendor's Solicitor a Bank Draft for the balance of the purchase money or the balance due on the Apportionment Account (if any). (c) If the Vendor's and the Purchaser's solicitors agree that the Vendor's mortgage is not to be redeemed prior to closing, the Purchaser's Solicitor should furnish to the Vendor's Solicitor two separate Bank Drafts, firstly for the amount required to redeem the Mortgage and secondly for the balance of the purchase monies. This shall imply an undertaking by the Vendor's Solicitor to forthwith discharge the Mortgage debt to the Vendor's Mortgagee and to furnish as soon as is reasonably pos- sible to the Purchaser's Solicitor proper evidence of such discharge and such release of Mortgage stamped and if registerable in the Registry of Deeds, duly registered, as may be appropriate. (d) The Vendor's Solicitor will agree (without charge) to act as agent for the Purchaser's Solicitor with a view to receiving the Deed of Assurance oontaining the Receipt clause. This is with a view to the Purchaser's Solicitor getting a good receipt for payment of the purchase monies pursuant to the provisions of Section 56 of the Conveyancing and Law of Property Act 1881. (e) Completion will be deemed to have taken place when the Vendor's Solicitor has received the balance purchase money outstanding and is at the same time in a position to furnish to the Purchaser's Solicitor the deeds and other items outstanding to close in accordance with the Vendor's Solicitors replies to the Requisitions on title and subsequent correspondence, in a position to satis- factorily explain all acts appearing on the Searches (if any) submitted by the Purchaser's Solicitor to the Vendor's Solicitor for explanation, and in a position to hand over or otherwise make available the keys of the property. The Vendor's Solicitor should confirm by telephone or telex to the Purchaser's Solicitor that com- pletion has taken place and thereupon the Vendor's

The landlords will not by obliged to issue invoices showing VAT as they receive payments from their lessees. Only one invoice showing VAT should be issued to the lessee and this at the end of the landlord's accounting year. Any difficulties in this regard )e.g. changes in VAT rates during the year, end of an accounting year not coinciding with the end of a VAT taxable period) will be settled by the Inspector.

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