Agreement – Another word for contract.
Bankruptcy search – A search made by your Solicitor, to ensure that there is no record of or impending bankruptcy.
Borrower – The person taking out a loan with the bank or building society.
Building insurance – Insurance taken out by the owner to protect against such risks as fire, landslip etc this is insisted upon by the mortgage provider.
Bridging loan – This is a loan taken out to bridge a financial gap whilst awaiting the main loan (Mortgage).
Boundaries – These define the extent and perimeter of the property. This is often shown on your deeds.
Buyer – The person buying the property (the purchaser).
Caveat Emptor – This means buyer beware.
Client – The person who has asked the Solicitor to act for them.
Chain – These are the property buyers and sellers that are linked together to form a purchase/sale chain, each party in the chain is governed by the person above and below and this dictates the pace of the transaction.
Completion Date – This is the date that the transaction becomes final.
Completion Statement – This is the final account from your Solicitor, this include fees etc.
Conditions of Sale – The conditions of sale are prepared by seller’s Solicitor and then forwarded to the purchaser’s Solicitor.
Contract – The legal document that confirms the sale/purchase of the property prepared in draft form by the seller’s Solicitor and then sent onto the purchaser’s Solicitor.
Covenants – These are obligation/restrictions attached to the property.
Deeds – These are legal documents that contain the information of the property in question.
Deposit – Normally 10% of the purchase price on exchange of contracts or less by agreement.
Disbursements – usually items managed and paid by the Solicitor on your behalf e.g. Searches vat etc.
Drainage/ water search – This is a search carried out by the Solicitor for the purchaser to check whether the property is connected to mains water and drainage and whether there are any other issues relating to drainage/water affecting the property.
Easement – This term means a right given to the property owner over adjoining property or land. Typically this could be a right of way or access, a right of drainage or a right to a water supply.
Environmental Search – This is a search that the solicitor carries out to check whether there are any environmental issues affecting a property. These may include flooding, coal mining and land fill.
Exchange of Contracts – The buyer’s Solicitor and the seller’s Solicitor cxchange contracts on the telephone. If there is a chain the Solicitors for everybody in the whole chain “exchanges contracts” at the same time using Law Society formula B. This then becomes legally binding.
Estate Agent – The Estate Agent acts on behalf of the seller to sell the property. They will prepare a set of details. They will negotiate the sale between the buyer and seller and any specific terms. The Estate Agent will prepare a ‘Memorandum’ of Sale giving details of the buyer, the seller, their Solicitors, the price and any specific terms which is sent to all parties to the transaction.
Equity – The equity in a property is the cash value that is left after you take the current worth of the property and deduct from that any mortgages outstanding.
Fixtures and Fittings List – This is a list of items that will be taken from the property. This is completed by the seller and a copy is attached to each part of the contract.
Freehold – This is the legal term for the way that an owner holds the property. The other terms are Leasehold and Commonhold. With freehold land the owner owns the property/land outright subject only to any mortgages, charges, easements, covenants etc. shown by the deeds.
Gazumping – This is where the seller sells to another buyer for a higher price. This can only happen before exchange of contracts.
Gazundering – This is where the buyer lowers his offer on the property after agreeing a price. This can only happen before exchange of contracts.
Joint Tenants – Where two or more persons buy a property they are called joint tenants or ‘tenants in common’. Where property is held as a joint tenancy if one owner dies the property passes to the other owner automatically without a Will. If the property is held as Tenants in Common each buyer owns their own share of the property which can be passed on by sale or by a Will.
Land Registry – The Land Registry is a Government department that holds the records of all property in the United Kingdom. Most property is now registered at the Land Registry.
Land Registry Search/Fees – The Solicitor will make searches at the Land Registry to check matters affecting the property and to get up to date copies of the Land Registry entries that relate to the property. On completion the Solicitor will send the deeds to the Land Registry who will register the new owner and any new lender. The Land Registry charges a fee for searches and for registration of property. See our links page for details of the Land Registry web site where a full list of fees is available.
Landlord – A landlord is the owner of the freehold of a leasehold property. Rent on a leasehold property is paid to the landlord who has the right to enforce the terms in the Lease.
Lease – A lease is a complicated document which details the matters affecting a leasehold property. Typically these will include the length of the lease, rent, service charges, rights of way, water, drainage and access and it will usually incorporate a plan.
Leasehold – A leasehold property means that the owner does not own the property or land outright. There is a lease which for a term of years grants the owner the right to occupy the property/land. There may be a rent or a ground rent to pay to the landlord.
Legal Executive – A qualified legal professional who is governed by the Law Society.
Lender – The bank or building society.
Local Search – This is a search made by the Solicitor on behalf of the buyer or in the case of a re-mortgage on behalf of the lender. The search covers Local Authority issues relating to the property.
Mortgage – A loan that is secured over a property.
Mortgage Deed – This is the document the borrower signs to agree to the terms set out in the mortgage offer. This document is sent to the Land Registry who register the mortgage as a financial charge on the property which is shown in the Charges Register.
Mortgage Offer – A written offer to lend money on a property.
Mortgage Valuation Fee – The borrower generally pays a fee to the lender to have the property valued for mortgage purposes. This enables the Lender to take a commercial view on whether the property is worth what the borrower says it is and whether it is suitable security for the mortgage.
Overriding Interests – Not all matters affecting property are registered or capable of being registered at the Land Registry. Nonetheless the property is still subject to such matters.
Preliminary or Pre Contract Enquiries – This is a set of questions that is sent to the seller’s Solicitor by the buyer’s Solicitor relating to the property. Typically these questions will consist of enquiries relating to boundaries, easements, persons living at the property etc.
Searches – There are many different types of conveyancing search. Which searches are needed for your property will be assessed by your Solicitor. A brief list follows:- Bankruptcy Search Coal Mining Search Commons Registration Search Environmental Search HM Land Registry Search HM Land Charges Search Index Map Search Local Search Mining Search Water Authority/Drainage Search.
Stamp Duty – This is the tax payable on the purchase of a property. The fees are set by the Chancellor of the Exchequer.
Subject to Contract – Before Exchange of Contracts (see above) all negotiations relating to the property are subject to contract this means they are not binding unless contracts are exchanged.
Surveyor – The person who is responsible for surveying the property. They will usually be a member of the Royal Institute of Chartered Surveyors RICS.
Survey – A physical inspection of the property by the surveyor to check the physical condition of the property and to advise the buyer upon the value of the property. There are different types of survey and your conveyancer will advise you on the best type of survey for you. Do not confuse a survey with a Mortgage Valuation.
Telegraphic Transfer Fee – This is a bank charge for sending money from bank to bank.
Tenants in Common – See joint tenants above.
Transfer Deed – This is the legal document that transfers the ownership of the property.
Valuation – See mortgage valuation above.
VAT – Value Added Tax is a Government tax charged on certain transactions.
Will – This is the legal document that sets out what you want to happen to your property after completion.