GLOSSARY

Agreement

Another word means contract or pact.

Auction

Where a property is bought at an auction house and an agreement is made to sell to the highest bidder (see exchange of contracts below).

Bankruptcy Search

A search made by the conveyancer to see whether the intended borrower or a purchaser has ever been, is, or is about to be declared bankrupt.

Borrower

The person taking out a mortgage or loan on their property, otherwise known as a mortgagor.

Boundaries

The boundaries define the perimeters of the property and are sometimes but not always marked out on the ground by fences or hedges. Boundaries are also often shown on the deeds plans although this too is not always the case and can sometimes cause disputes.

Bridging Loan

A loan taken out to “bridge” the time whilst waiting for the receipt of a mortgage or the sale of a property.

Building Insurance

Insurance taken out by the owner of the property to insure the property against risks such as fire, flooding etc. The responsibility to insure the property will often pass to the purchaser on exchange of contract. On a new build property, the developer will always insure the property until completion.

Buy to Let

This is where a purchaser buys a property with the intention of letting it out commercially. There are usually mortgages specific to this type of purchase called ‘buy to let’ mortgages.

Buyer

Sometimes also known as the purchaser, this is the person that is buying the property.

Caveat Emptor

Literally means let the purchaser beware. The purchaser is responsible for finding out the condition of the property by survey and is aware they are buying ‘as is’ and subject to all defects.

Chain

These are the property sellers and purchasers that link together to make the chain for a particular purchase or sale. The chain may be relatively short, consisting of only two people, i.e. you as purchaser and the person you are buying from as seller or alternately it may consist of several purchasers and sellers. The longer the chain, the more time a purchase or sale may take as the pace of the entire transaction can only go as fast as the slowest link.

Client

The purchaser/seller who has asked for legal help from a conveyancer.

Completion Date

This is the date when the purchase becomes final. By this time the seller must move out of the property and the purchaser is allowed to move in as the purchase price is paid by the purchaser’s conveyancer and received by the seller’s conveyancer.

Completion Statement

This is the final account that the conveyancer will send and it will detail his/her fees plus the VAT and all searches etc. This is usually sent between the exchange and completion stage.

Conditions of Sale

The conditions of the sale are detailed in the contract that the seller’s conveyancer prepares and sends to the purchaser’s conveyancer. There are standard Law Society conditions to which the conveyancer adds any special conditions.

Conservation Area

This is land protected by a local authority. Properties in conservation areas may be subject to planning restrictions mainly in relation to the exterior of the property.

Contract

The legal document confirming the sale/purchase of a property. This is prepared in a draft form by the seller’s conveyancer and sent to the purchaser’s conveyancer. Once all questions are resolved it is then approved and the seller and the purchaser each sign their own copy.

Conveyancer/Conveyancing

Conveyancing’s legal description is the work that is done to transfer ownership of a property from one person to another. Conveyancer is the job title of the person doing the legal work.

Council for Licensed Conveyancers (CLC)

the official council that governs licensed conveyancers.

Covenants/Restrictive Covenants

These are restrictions/obligations that are attached to the property. For instance, there may be an obligation to maintain a fence or boundary which is a positive covenant or alternately there may be a restraint on the type of building on the land which is called a restrictive covenant.

Deeds/Title Deeds

Legal documents that contain information about a property.

Deposit

There are two types of deposit that a purchaser may be asked to produce. Sometimes the estate agent will ask for a deposit to secure the property in “goodwill”. You are not advised to pay this deposit without first consulting with your conveyancer. The second type of deposit is the one a purchaser will pay to the conveyancer to hand over with the contract. In convention, this is 10% of the purchase price but often less than this will be agreed to.

Disbursements

Simply put, this means items that the conveyancer must pay to other persons for you. Typically, these are things like VAT, Land Registry fees, stamp duty and other searches.

Drainage/Water Search

Conveyancers carry out these searches for the purchaser to check whether the property is connected to mains water and drainage.

Environmental Search

These are searches where environmental issues are considered by the conveyancer to see if the land has a history of contamination, and other surrounding land issues. It can also cover flood risks and the possible presence of radon gas.

Equity

The equity in a property is the amount that is left over after you take the current worth of the property and deduct from that any mortgages still on-going on the property.

Estate Agent

The estate agent acts on behalf of the seller to sell the property. They are the negotiator between purchaser and seller and iron out any disagreements, providing lawfully accurate details.

Exchange of Contracts

This is done via a telephone conversation between the purchasers, conveyancer and the seller’s conveyancer. The purchase is legally binding upon exchange of contracts.

Financial Advisor

Is accountable for arranging the mortgage or finances to purchase the property and will often organize any life insurance, mortgage protection insurance necessary etc. Our sister company Taylor Rose Financial often work in conjunction with our property department to provide a swifter and more comprehensive service.

Fixtures and Fittings List

A legal binding list; documenting any items being left in or taken from the property. This is completed by the seller and a copy is attached to each part of the contract.

Freehold

The way in which an owner holds the property. Freehold means owning the property entirely subject only to any mortgages, easements, charges, covenants etc. documented in the deeds.

Gazumping

This is where the seller will sell to a different purchaser for a higher price and will only occur prior to exchange of contracts.

Gazundering

This is where after agreeing a price with the Seller, the purchaser then lowers his offer on the property.

Ground Rent

This is the rent a landlord is paid usually on a leasehold property if there is a long lease.

Inland Revenue

A government department that collects tax. The Inland Revenue now insists by law that every purchaser of property must fill in a stamp duty land transaction form which must be sent to Inland Revenue along with any stamp duty within 30 days of completion. Not doing so leads to considerable fines.

Instructions

This means authorisation by the client to the conveyancer. The conveyancer will keep the client informed and act on the client’s instructions and wishes.

Joint Tenants

Where two or more persons buy a property, they are called joint tenants or tenants in common no matter whether the property is common hold, freehold or leasehold. In joint tenancy if an owner dies the property passes automatically to the other owner without a Will. If, however, an owner dies and the property is held as Tenants in Common each purchaser has their own share to be distributed by being passed on or given in a Will.

Land Registry

The majority of properties are registered at the Land Registry. It is a government department that holds a record of most properties in the UK.

Land Registry Search/Fees

Throughout the process the conveyancer will need to make regular searches at the Land Registry to check for information relevant to the property. At the time of completion, the conveyancer will then send the deeds to the Land Registry. The property will be registered with the new owner and then they will charge a fee for their services.

Lease

A lease is a complex document which documents issues affecting a leasehold property. Usually these will incorporate lease length, the cost of rent, service charges, rights of way, water, drainage and access. It encompasses all aspects a tenant needs to agree to and understand.

Legal Executive

A qualified legal professional governed by the Chartered Institute of Legal Executives.

Lender

Otherwise known as the mortgagee; the building society or bank who lends money to property owners.

Listed Buildings

Are subject to planning restrictions as they are protected by a local authority.

Local Search

A conveyancer makes these searches on behalf of the purchaser; or in the case of a re-mortgage on behalf of the lender. The search covers local authority issues relevant to the property.

Local Search Indemnity Insurance

Insurance which is taken out on re-mortgages where there is no reason to undertake a full local authority search and protects the lender from losing out financially.

Low Cost Housing

Also called Social Housing these are properties sold to local Housing Associations or the Local Authority for shared ownership or rental income.

Mortgage Deed

The deed signed to show agreement with the mortgage offer, this is then sent to the Land Registry.

Mortgage Offer

This contains all the terms and conditions upon which money is loaned on a property.

Mortgage Valuation

The mortgage valuer does not always inspect the physical condition of the property. The borrower pays a fee to the lender in order to have the property evaluated for the mortgage.

New Build

Where a property is being bought for the first time from the developer or builder.

Off Plan

Where a property yet to be constructed is bought.

Overriding Interests

The Land Registry may not be able to list all matters which affect the property, and sometimes certain rights will still be unknown. Regardless of this, the rights will still apply nonetheless. The purchaser will take on the property on this basis even if they were not registered on the title.

Preliminary or Pre-Contract Enquiries

Typically, these questions will consist of basic questions relating to the property and is sent to the seller’s conveyancer by the purchaser’s conveyancer.

Property Information Form

Is a legally binding form completed by the seller. This gives basic information about the property.

Redemption

This is the term for when an owner pays back the mortgage. Firstly, you need a redemption statement, a statement of what is owed, and if you are paying the loan back early it is possible you will be charged an early redemption charge (ERC).

Searches

The amount of searches necessary depends on the property itself.

These include:

• Tin Mining Search
• Bankruptcy Search
• Brine Search
• Water Authority/Drainage Search
• Coal Mining Search
• Commons Registration Search
• Company Search
• Environmental Search
• HM Land Registry Search
• HM Land Charges Search
• Index Map Search Local Search

Shared Ownership Property

A property that has been bought with the housing association or council jointly.

Stamp Duty

The tax you pay when you buy a property.

Stamp Duty Exempt

The government has special areas of the country that are exempt from paying stamp duty. A conveyancer will let you know if the property for purchase is in one of these areas. Additionally, at present some first-time buyers are also exempt from stamp duty.

Stamp Duty Land Tax Form

A complex form with many guidance notes.

Subject to Contract

All negotiations are not legally binding until the exchange of contracts.

Surveyor

Usually be a member of the Royal Institute of Chartered Surveyors RICS, the surveyor will physically inspect the property.

Telegraphic Transfer Fee

Where a bank will charge for sending money from bank to bank.

Tenants in Common

Both you and your partner will own the property; however, you will each own shares of the property which you are free to sell or pass on to anyone you wish when you die in your Will.

Transfer Deed

The legal document that will transfer ownership of the property.