Elizabeth Ovey, Malcolm Waters, and Philip Freedman analyse the changes to the fourth edition of the Standard Conditions of Sale

The fourth edition of the Standard Conditions of Sale (SCS), which comes into effect on 13 October 2003, takes account of the changes made by the Land Registration Act 2002 and also anticipates the implementation of part 1 of the Commonhold and Leasehold Reform Act 2002.

A second edition of the Standard Commercial Property Conditions (SCPC) is planned in the future.

Copies of the SCS are available from Oyez Office Supplies (tel: 01908 361166).

Full details of all the changes are available in the explanatory notes to the SCS.

These notes are distributed by Oyez with each pack of the SCS during an introductory period, and can also be viewed at www.lawsociety.org.uk.

The main changes in the fourth edition are:

- It has abandoned the distinction between 'the agreement' and 'the contract' and refers only to 'the contract'.

- 1.1.4 provides that the SCS apply except as varied or excluded by the contract.

- The special condition stating that the property is sold subject to the incumbrances set out on the front page has been deleted, but 3.1.2(a) will ensure that the sale continues to take effect subject to any incumbrances set out on that page.

- Where a separate price is agreed for any chattels included in the sale, the 'purchase price' will refer to the price agreed for the property and the 'chattels price' will refer to the price separately agreed for the chattels.

The SCS provide for the deposit to be 10% of the total of the purchase price and the chattels price (2.2.1).

- 1.1.1(f) uses the term 'conveyancer' (rather than 'solicitor') to refer to those who may lawfully carry out conveyancing work for reward.

- Unless the property is sold by auction, the deposit must be paid either by direct credit or by cheque drawn on a solicitor's or licensed conveyancer's client account.

The money due on completion may now be paid only by direct credit, coupled where appropriate with the release of any deposit held by a stakeholder (6.7).

- 1.1.3 explains when a party is ready, able and willing to complete.

- 1.3.6 explains that the presumed times of receipt may be displaced not only by proof of the actual time at which a notice or document was received, but also by proof that the notice or document was not received at all.

- 1.3.3(b) enables a notice or document to be sent by e-mail where delivery of the original is not essential.

It only permits notices or documents to be sent in this way if an e-mail address for the intended recipient is given in the contract.

- Under 1.3.5(c), an automated response to an e-mail that the intended recipient is out of the office is treated as proof that the notice or document has not been received.

- 1.3.7(e) provides that (in the absence of proof to the contrary under condition 1.3.6) a notice or document sent by e-mail is treated as having been received before 4pm on the first working day after dispatch.

- 1.5 contains a general prohibition on the transfer by the buyer of the benefit of the contract.

- 2.3.6 provides that, on a sale by auction, the deposit is to be paid to the auctioneer as agent for the seller.

- 4.1.1 requires the seller to provide the buyer with proof of his title to the property and of his ability to transfer it or to procure its transfer (the latter alternative applying, for example, to a sub-sale).

- Where the title is registered, the effect of 4.1.2 is that the proof must include official copies of the individual register and any title plan referred to in it, and of any document referred to in the register and kept by the registrar (unless the document is to be discharged or overridden at or before completion).

- 4.2.1(a) now bars the buyer from raising any requisitions on the title shown by the seller before the making of the contract, though the buyer retains the right to raise requisitions on matters coming to his attention for the first time after the contract is made (4.2.2).

Where the seller deduces title (either in whole or in part) after the contract is made, 4.3.1 continues to allow the buyer to raise requisitions within six working days of the date of the contract or delivery of the seller's proof of title on which the requisitions are raised.

- 6.1.2 states that, where the money due on completion is received after 2pm, apportion-ments are to be worked out as if completion had taken place on the next working day, and compensation is to be calculated as if completion had been deferred to that day as a result of the buyer's default.

6.1.3 disapplies 6.1.2 where the sale is with vacant possession and the buyer is ready, able and willing to complete but does not pay the money due on completion because the seller has not vacated the property by 2pm.

In such a case, 6.1.3 provides that the seller is to be treated as in default, so that compensation will be calculated on that basis under 7.3.

- 8.3 extends the provisions governing consents to assign or sub-let to cases where consent is required for the creation of a new lease of freehold land.

- 8.3.1(b) confirms that any necessary consent must be in a form which satisfies the requirement to obtain it.

- 8.3.3 provides that, where the parties agree to complete the contract after the contractual completion date, the right to rescind will not arise unless the consent has not been obtained by three working days before the later date agreed for completion.

- 9 contains new provisions for commonhold in anticipation of the implementation of part 1 of the Commonhold and Leasehold Reform Act 2002.

The main reason for adopting this new edition is that it caters for the operation of the Land Registration Act 2002, which has no equivalent to section 110 of the Land Registration Act 1925, so that from 13 October 2003 there will be no statutory provision for a seller to deduce title.

The 2002 Act will also require registration of leases for terms over seven years.

Any sale contract entered into after 13 October should include provisions covering these matters.

It is thought that where an obligation on the seller to deduce title in accordance with section 110 is included in a contract for the sale of registered land entered into before 13 October 2003, this obligation will survive beyond that date.

However, it is doubtful whether anything could be implied into an existing contract for the assignment of an unregistered lease, having more than seven years unexpired that would impose additional obligations on the seller to produce the superior title to facilitate registration of the lease by the buyer.

The position in respect of the SCPC is similar - if contracts are exchanged using the old edition, attention must be given to the need to include suitable provisions for the deduction of title and to enable the buyer to obtain registration of a lease having less than 21 years unexpired.

Elizabeth Ovey, Malcolm Waters and Philip Freedman are members of the standard conditions working party