Conveyancing Terminology

Abstract title – a list of all documents that prove title to land when a property has not been registered at the Land Registry.

Apportionment – the proportionate sum of money that a person must contribute or is entitled to receive. This is normally on leasehold properties where ground rent and service charges have been paid by the seller to a specific date after completion takes place. They buyer will pay an apportionment of the amount paid.

Bankruptcy search – formal enquiry made by the buyer’s solicitor on behalf of the Lender to ensure that the buyer is not bankrupt.
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Bridging loan – a loan taken out to “bridge the gap” whilst waiting for the sale of a property or the receipt of a mortgage.

Building regulation consent – approval by the Local Authority on the structural design and materials used in building works. This also covers replacement windows, electrical and gas alterations at the property.
Capital gains tax – a tax on the sale of assets, including property. Capital Gains Tax is paid on the sale of property which is not your sole residence i.e. a holiday home or a buy to let property which you own in addition to your residence.

Caveat Emptor – ‘buyer beware” which means the buyer must rely on his own investigations regarding the property. It is always advisable to have a survey carried out by a reputable surveyor and you should check the central heating and all white goods sold with the property are in good working order.

Certificate of Title – a standard form required from the Solicitor by a mortgage lender prior to release of the mortgage loan. A lender will usually require between 5 and 7 working days to be given between exchange of contracts and completion to enable sufficient time for funds to be released.

Chain – a series of property transactions that are dependent on one another.

Charge – a charge can be registered against the title of a property in the same way as a mortgage. It gives the person having the benefit of the charge security, as an intending buyer will wish to ensure that it is removed when he or she purchases the property.

Coal mining search – a search required in certain areas to ascertain whether any such issues might affect a property.

Completion date – the date that a contract takes effect: vacant possession must be given, and ownership passes from seller to buyer. This means that all parties in the chain of transactions must vacate the property leaving it in a clean and tidy condition.

Completion statement – a statement listing the sums being received and the payments required for completion of the transaction. This will be prepared by your solicitor usually upon exchange of contracts to show any moneys due from you to give sufficient time to moneys to be sent.

Conservation Area – an area protected by additional planning restrictions. This will be revealed in the Local Authority search and restrictions must be complied with.

Contract – the agreement to buy and sell that sets out all of the terms. One copy is signed by the buyer and one by the seller. There is no binding agreement until Contracts are “exchanged”.

Contract Race – if a seller decides to deal with more than one prospective buyer (often with a view to exchanging contracts with whoever is ready first) there are strict rules to be followed by Solicitors in the cases.

Conflict of interest – where two parties have different interests, a solicitor cannot protect both, and therefore cannot act for both parties.

Conveyancing – the process by which the ownership of land is transferred from one person to another.

Covenant – a legal obligations attaching to land usually restrictive thereby not allowing to you do certain things to or on the land.

Costs – the charges incurred by a person instructing a lawyer to act for them.

Deed – a formal document that must be signed executed and witnessed.

Defect in title – a flaw in the title to the property

Deposit – part of the purchase price (usually 10%) aid at exchange of Contracts.

Disbursements – items that the Conveyancer must pay to the other persons on your behalf, such as local search fees, Stamp Duty and Land Registry fees.

Easement – a right attaching to land over an adjoining property.

Exchange of contracts – the point at which the agreement to buy or sell becomes legally binding.

Equity – refers to the net value of a property after mortgages or other charges are paid off.

Fixtures and Fittings form – a list provided by the seller showing items to be either included or excluded from the sale.

Flying freehold – where part of one Freehold property is built over another.
Freehold – a type of title to a property that continues indefinitely.

Gazumping – when the seller sells to another buyer for a higher price, before the exchange of contracts.

Gazundering – when the buyer lowers his offer on the property after agreeing a price, before the exchange of contracts.

Ground rent – the annual charge made by the freeholder to the leaseholder for the right to occupy a property.

Indemnity Insurance – an insurance policy to cover a defect in the title, or some other legal deficiency with the property.

Joint Tenancy – one method of co-ownership, where upon death of one co-owner, the deceased’s share would pass automatically to the surviving owner.

Land Registry – the state department which records land that has a registered title.

Land registry search – searches made to check that no changes have been made to the Land Registry since the last official copies were produced.

Lease – for a leasehold property, this document sets out the terms of occupation between landlord and tenant.

Leasehold – a right to have the property for a set period of time, known as “the term” of the Lease.

Listed Building – a building of historic or architectural interest, affected by special restrictions. This will be revealed by the Local Authority search result.

Local authority search – application made to the local authority for information that may affect a property. The search result should show such things as planning restrictions and whether the roads have been adopted by the Council. It will also show whether a Grant has been given in respect of the property for works be carried out.

Maintenance charge – an amount paid by a leaseholder as a contribution to the cost of maintaining and repairing the structure of the building.
Management company – company formed to manage a building subject to various leases.

Managing agents – firm employed by a landlord or management company to arrange practical maintenance and general management of a building.

Money Laundering Checks – identity checks that Solicitor’s must make before acting for a client.

Mortgage – securing a loan on a property.

Mortgagee – this is usually a Bank of Building Society but it can be anyone that lends you money to buy a property on the security of the property.

Mortgagor – this is the person borrowing the money and obtain the mortgage from the Mortgagee.

NHBC – a warranty/insurance scheme for new build properties against major structural problems for 10 years.

Negative Equity – where the debts secured against a property exceed its market value.

Office copy entries – official copies of the Land Registry’s title for the property. These indicate who owns the property and reveals any charge/mortgage against it.

Planning permission – approval by the Local Authority for development or change of use of a property.

Preliminary enquiries – initial questions sent to the seller’s Conveyancer by the buyer’s Conveyancer.

Property Information Form – a standard questionnaire form completed by the seller relating to the property.

Redemption – repayment of an existing mortgage on the property.

Redemption Statement – the statement issued by the Lender specifying how much they require for discharging the mortgage/charge over the property. This is now usually done by electronic notification direct to the Land Registry.

Registered land – land to which the owner’s title is registered at the Land Registry.

Retention – money withheld until certain conditions are satisfied.

Service charge – payments under a Lease for maintenance and repairs to due to the Management Company or Landlord.

Stamp Duty Land Tax – A property tax paid by the buyer to HMRC, the amount varies according to the price of the property.

Survey – a report carried out by a surveyor on the apparent physical condition of the property.

Telegraphic transfer fee – a bank charge for sending funds for ‘same-day’ clearance.

Tenants in common – a method of co-owning property (as opposed to joint tenancy) whereby, upon the death of one of the co-owners, the deceased’s share does not pass automatically to the surviving owner.

Tenure – type of ownership: either freehold or leasehold.

Title deeds – the documents that show ownership of a property if the title has not yet been registered.

Transfer – the Deed which transfers the registered ownership of a property from the seller to the buyer.

Tree preservation order – an order made by a Local Planning Authority which prevents particular trees from being cut down or lopped without permission. This will be revealed by the Local Authority Search.

Trust Deed – this is a legal document setting out how the property has been purchased by two or more people who have each contributed different amounts to the purchase thereby giving each of them a percentage of the property in accordance with their contributions.

Undertaking – this is a promise which can be enforced by law.

Vendor – the person selling the property.