Adopted Highway:
A road (and ancillary paths and sometimes verges) maintained by the local authority at public expense.
Advance:
The original amount of the loan from a Bank or Building Society.
Assent:
The name given to a transfer document by which the representatives of a deceased owner transfer the property to the person entitled.
Assignment:
When the lease is transferred.
Assured Shorthold Tenancy:
A form of tenancy agreement which permits the landlord to secure possession of the property at the end of the agreed tenancy period.
Attorney:
A person appointed to act on behalf of another person and sign documents on their behalf. See Power of Attorney.
Boundaries:
The legal definition of the limits of the property, boundaries are normally marked by walls, fences or hedges. The deeds for the property will clearly indicate the relevant boundaries and may indicate who is responsible for maintaining them.
Bridging Loan:
A loan taken over a short term, usually to bridge the gap when buying a new property before the old one is sold.
Building Survey:
An extensive report prepared by a surveyor on all parts of the property that are visible and easily accessible, identifying any building defect, and how that can be repaired.
Chain:
The idea that many buyers and sellers are joined together like the links of a chain, and each sale is dependent on the buyers and sellers lower down in the chain. Often a long chain complicates and lengthens the conveyancing process.
Charge:
A sum of money secured on a property. Any sum of money borrowed from a bank or building society to buy a property is usually secured against that property. It is possible to have more than one charge registered against a property.
Completion Date:
The date on which all purchase money is transferred and the title deeds are legally transferred. Keys are handed over and the new owners move into the property.
Completion Statement:
see Financial Statement.
Conveyancing:
The legal process used to buy and sell land and property.
Contract:
The agreement between the seller and the buyer which is legally binding.
Covenants:
Any restrictions or obligations which are applied to a property. A covenant may require that you maintain a property to a certain standard or restrict the conversion of a house into flats.
Deed of Covenant:
A document or deed containing an agreement to pay or do something.
Deeds:
Documents which state the legal owner of the property and identify the holder of a legal charge is when the property has been purchased with a mortgage.
Deposit:
The proportion of the total purchase price paid at the time of exchange of contracts to ensure the buyers are fully committed.
Disbursements:
These are expenses incurred during the conveyancing process they include search fees, Stamp Duty Land Tax (SDLT) and Land Registry fees.
Easement:
Any rights of way over land owned by someone else.
Equity:
The difference between the value of a property and the amount outstanding on any mortgage or other charge on the property.
Engrossment:
The final version of a legal document, prepared for signature signed by all relevant parties.
Epitome of Title:
A summary or list of relevant title deeds proving the history of ownership of a property.
Exchange of contracts:
The formal exchange of the two identical copies of the Contract when the Seller and Buyer become legally bound to complete the transaction on an agreed date.
Flying Freehold:
If at least a part of one property is built on top of part of another property (and the upper property owner does not own the whole building or land underneath the “flying” part) and the legal structure of the block is not leasehold, then a flying freehold will arise.
Financial Statement or Completion Statement:
A document produced by your lawyer listing all the financial elements of the property transaction. It is prepared after an exchange of contracts and before completion. The statement will provide full details of legal fees, disbursements and VAT.
Fixtures and Fittings:
Items in the property which may, or may not, be included in the sale of the property – these items will be itemised in the Fittings & Contents Form included in draft contract papers.
Freehold:
If you buy a freehold property, you are not only buying the building, but also the land on which it stands. Freehold ownership is registered at the Land Registry. This freehold title can be bought and sold.
Freeholder:
The person who owns the freehold.
Full Title Guarantee:
The standard guarantee given by an absolute owner to the Buyer.
Ground Rent:
An annual rent which a leaseholder has to pay to their landlord. The lease will state how much ground rent is payable and when any increases become payable and on what basis the increase is calculated.
Indemnity Insurance Policy:
This is an insurance policy which protects the purchaser from any financial loss caused by a problem with the legal title to a property.
Joint Tenants:
Full ownership of the property transfers to the surviving person when one of them dies. This applies irrespective of what is written in a will.
Land Charges Search:
A search against a person’s name at the Land Registry to see if that person has been the subject of any bankruptcy proceedings and (if the property is unregistered) to see if there are any mortgages or other adverse interests registered against the property.
Land Registry:
The government organisation that maintains a register of properties and their ownership in England and Wales. It now covers approximately 90 – 95 percent of residential dwellings.
Land Registry Fee:
The fee payable to the Land Registry to register any change in the property details including a change of ownership.
Land Registry Search:
A search at the Land Registry to check that nothing new has been registered against the property since the date the registers were last inspected.
Landlord/Lessor:
Usually (but not necessarily) the Freeholder but certainly the person entitled to receive the ground rent from the Lessee or Tenant.
Lease:
A document setting out the rights and obligations of the Landlord and Tenant (Lessor and Lessee) in the leasehold arrangements.
Leasehold:
Where the ownership of property is for a limited period only, for example 99 years or 999 years. It will normally involve payment of an annual ground rent.
Lessee:
The present owner of the leasehold property. This contrasts with the freeholder or landlord whose interest is subject to the lessee’s rights under the lease until the lease term has come to an end.
Lessor:
Another word for Landlord.
Licence to Assign:
The document issued by a landlord giving legal permission to a tenant to assign, or sell on, their lease.
Limited Title Guarantee:
A title guarantee given by a Seller who has limited knowledge of the property and cannot give a full title guarantee such as someone selling on behalf of a deceased owner.
Mortgage:
A loan from a bank or building society which is secured on the property. If the mortgage payments are not made, the lender has a right to repossess the property and sell it.
Mortgage Indemnity Policy:
Insurance cover which in certain circumstances, your mortgage lender could insist upon, and which is intended to cover any losses the lender might occur if a property is repossessed.
Mortgagee:
The bank or building society which lends money against a property.
Mortgagor:
The person who borrows money by way of a mortgage to buy a property.
Mortgage Deed:
A document used when a Lender lends money to a Buyer or existing Owner. The document is registered against the property at the Land Registry and secures repayment to the Lender.
Mortgage Offer:
This specifies the terms upon which the Lender is prepared to make the loan including the specific financial details and period of repayment.
Mortgage Term:
The length of time agreed for the repayment of the loan.
Mortgagee:
The Lender person or Company who benefits from the Mortgage security (e.g. Bank or Building Society).
Mortgagor:
The Property Owner (i.e. the Borrower) who enters into a mortgage deed in favour of a Lender.
NHBC:
National House Builders Council which provides a 10 years’ guarantee on new build properties.
Negative Equity:
Where the amount of money outstanding on a loan secured on the property is more than the property’s market value.
Occupier’s Consent:
Any person who lives at the property who is not an owner (and so will not be signing the mortgage deed) will be asked to consent to the mortgage being taken out and agree to move out if the mortgagee lender takes possession by reason of default of the owner.
Office Copies:
In the case of registered land, this is a copy of information held by the Land Registry setting out details of the title to a property i.e. who owns the property etc.
Party Wall:
A wall owned jointly with a neighbour and repairable at joint (and normally equal) expense.
Planning Permission:
Approval by the planning authority to the construction (and extension/alteration) of a property or a change of its use.
Power of Attorney:
A document by which someone appoints another person, to act as their attorney.
Property Information Form:
A standard questionnaire completed by a Seller to give information about the property to the Buyer (e.g. who maintains boundaries and whether there have been any disputes).
Redemption:
The legal term for paying off a mortgage.
Redemption Penalty:
A penalty payment charged by a Lender if a loan is repaid within a period specified in the mortgage offer.
Registered Land:
Any land where details of ownership and any other interest in it are held by the Land Registry.
Rent Charge:
Some freehold properties are required the payment of a modest rent (despite being freeholds). It is sometimes created simply for profit but may be used as a legal device to ensure estate covenants are enforceable.
Requisition on Title:
Questions raised by the purchaser’s lawyer about the property’s ownership.
Retention:
Money held back and retained by a lawyer until some further action is completed or building work carried out.
Searches:
These enquiries are made at the start of the conveyancing process. They are designed to provide the buyer with any important information which could affect their use or future sale of the property.
• Environmental Search – A search to see whether there is any indication that the property may be affected by contamination, flooding etc.
• Local Search – A search submitted by us to the local authority to ask a considerable number of questions about the property including (by example) information on planning permission(s) and whether the adjoining roadway is maintainable at public expense.
• Drainage & Water Search – A search providing information on mains drainage and sewers serving the property.
Service Charge:
Money paid to a landlord for a property’s upkeep and repair.
Stamp Duty Land Tax (SDLT):
A government tax paid by people buying property.
You pay SDLT on increasing portions of the property price and at an increased rate on second homes and/or if you are not a UK resident. Use the SDLT calculator (http://www.hmrc.gov.uk/tools/sdlt/land-and-property.htm) to work out how much tax you’ll pay.
Structural Survey:
see Building Survey.
Subject to Contract:
This means the agreement is not yet legally binding. In conveyancing terms, negotiations are, ‘subject to contract,’ until the process reaches an exchange of contracts.
Tenants in Common:
If two or more people own a property on a separate half or defined share. This means that if one tenant in common dies, then their share of the property does not pass automatically to the other tenant in common but instead is passed on in accordance with their wishes stated in their will. If there is no will, the intestacy laws are followed.
Term:
A specified period of time. Often used for the length of a mortgage.
Title:
An owner’s actual right of ownership – whether or not the owner is in occupation.
Transfer:
A document which actually transfers ownership of a property from one person to another (as opposed to a Contract which may include an obligation to effect a transfer at a later date).
Transfer of Equity:
A document transferring ownership of a part share or interest in a property from one person to another.
Tree Preservation Order:
An order made by the planning authority specifying a tree or group of trees as protected and requiring that authority’s permission to cut branches or fell them.
Unregistered Land:
Land that is not yet registered at Land Registry. Title deeds for the property, that prove ownership may consist of a number of separate documents showing the history of the land concerned including conveyances, mortgages, deeds of easement etc. See Epitome of Title.
Vacant Possession:
A Seller required to give vacant possession must (on completion) leave the property (including the garden and outhouses) empty of people, possessions and rubbish.
Valuation:
A very simple form of survey designed to establish what the property is worth and nothing more.
Vendor:
An old word for Seller.
Wayleave Agreement:
A written agreement entered into with an owner to give a service provider (e.g. Electricity or Telephone company) a right for their cables to pass under or over their property.
Please note: Our Jargon Buster is a glossary of terms and is necessarily basic, terms are also subject to exceptions. They are not nor are intended to be legal definitions of these words. If you encounter these words within documentation in the course of a transaction and are not wholly certain of their meaning or effect then you must ask us for appropriate advice.
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