...a little bit of law - Back to Basics
05 November 2016
There are certain basic steps that apply to almost all transactions involving the acquisition of land. There may be a tweak here or a bolt-on there but the basic underlying steps are often the same.
First things first, there are a few terms which lawyers frequently use in connection with procedural matters that may not mean much to clients, so here is a quick explanation of some of them.
'Engrossments’: an engrossment is the final printed version of a particular document that is going to be signed by the parties. This final version is usually printed on good quality paper and may be bound. The engrossment of the Magna Carta was written on sheepskin – but even the legal profession has moved on since then!
'Executed’: a ‘signed’ document takes effect as a contract, whilst an ‘executed’ document takes effect as a deed. Some documents just get signed, whilst others get executed. Execution requires certain formalities to be followed. Where an individual is executing a document in his own name, then his signature needs to be witnessed. The witness watches him sign and then signs herself. Where a company is a party to a document, how that document is executed will depend on the relevant statute and the company’s constitution. Commonly, companies execute documents by having a director sign in the presence of a witness or by having two directors or one director and the company secretary sign.
'Witness’: one party to a deed cannot also be a witness for another party’s signature. There is no statutory requirement for a witness to be independent or disinterested, though it is best practice for an unbiased, independent person to sign as a witness.
'Counterpart Lease’: in a transaction where a lease is being granted, the counterpart lease is the engrossment of the lease which is executed by the tenant. The ‘lease’ itself is an identical engrossment – except that it is executed by the landlord.
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