To help you through the jargon we have outlined below a list of the typical terms you may come across. If something isn’t listed here, call or email us and we’ll explain it to you and add it to the website for future users.

Bankruptcy Search – A search made by the lawyer to check whether a buyer or a borrower has been, is or is about to be declared bankrupt.
 
Borrower – The person taking out a loan or mortgage on a property, sometimes also known as the Mortgagor

Boundaries – The boundaries define the extent of the property. Boundaries are often although not always accurately, shown on the deeds plans.

Building Insurance – Insurance taken out by the owner of the property to insure the property against risks such as fire, landslip etc. The responsibility to insure the property often passes to the buyer on exchange of contracts.

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Caveat Emptor – Literally means let the buyer beware. The buyer is responsible for finding out the condition of the property by survey and any matters affecting the legal title to the property by using a lawyer to check the title and carry out searches.

Chain – This occurs when there are a number of people buying and selling and they are dependant upon one another. The chain may consist of only two people i.e. you as buyer and the person you are buying from as seller or it may consist of several buyers and sellers. Your sale or purchase can only proceed at the same pace as every one in the chain. It is a bit like being in a traffic jam.

Chancel search - A search to see if the property falls within an area that makes it liable to pay towards repairs to the local church.

Client Care Letter – This letter is sent out at the beginning of the transaction and must give clear details of what work will be carried out, who will be doing it, at what cost and the complaints procedure of the firm. The client is usually asked to sign and return one copy. We are not allowed to start work for a client until they confirm in writing that they wish us to do so.

Coal Mining Search – If the property is in an area designated as a Coal Mining Area the lawyer will search to see whether there are any issues which currently affect the property eg a possibility of subsidence if mining was ever carried out in the vicinity

Completion Date – This is the date when the purchase becomes final and the property passes from the seller to the buyer. The purchase price is paid by the buyer’s and received by the sellers. The seller must move out of the property on this date. The keys are released to the  buyer and they may move into the property.

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Completion Statement – This is the final account that we will send and it will detail our fees plus the VAT and all searches, along with the monies required to purchase the property or what will be received if it is a sale. This is usually sent after exchange and before completion.

Conditions of Sale – The conditions of the sale are detailed in the Contract that the seller’s lawyer prepares and sends to the buyer’s lawyer. There are standard Law Society conditions to which the lawyer adds any Special Conditions.

Conservation Area – This is an area protected by the Local Authority. Properties in a conservation area may be subject to planning restrictions particularly relating to the exterior of the property.

Contract – The legally binding document that confirms the terms of sale/purchase of the property, such as price, names of the parties etc. This is prepared in a draft form by the seller’s lawyer and sent to the buyer’s lawyer. Once all queries are answered it is then approved and the seller and the buyer each sign their own copy. 

Conveyancing – Conveyancing is the legal description of the process that is carried out to transfer ownership of a property from one person to another. 

Covenants/Restrictive Covenants – These are obligations/restrictions 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 there may be a restriction to do something e.g. not to carry out a business which is a restrictive covenant.

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Deeds/Title Deeds – Documents signed and usually witnessed, encompassing the terms of an agreement. The documents act as evidence that the person selling the property actually owns it, and also lay out any rights or obligations affecting the property. If you are selling, then valuable time can be saved if your title deeds can be obtained by us at an early stage. If you have a mortgage then usually your bank or building society hold these - it is therefore important to supply your Mortgage Account Number.

Defect Title – A problem with the documents relating to the property eg lack of right of way.

Defective Title Insurance – A defective title means that there is a problem with the documents relating to the property. They may be missing, destroyed, lost or simply inadequate. A buyer will not usually buy a property with a defective title unless the seller provides him with an insurance policy to protect him and his lender against any financial loss which could result from the defective title.

Deposit – This is a payment made by the Buyer to the Seller on Exchange of contracts. It is normally 5% of the purchase price and is non-refundable if the buyer later withdraws. There is also a “Goodwill Deposit” that estate agents sometimes ask for to secure a property. This should not be paid without discussing it with us first.

Disbursements – Simply put this means items that must be paid to other persons/third parties on your behalf. Such as VAT, Stamp Duty, Land Registry Fees and searches.

Drainage/Water Search – This is a search carried out by 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.

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Easement – This means a right given to the Property Owner over adjoining property or land. This could be a right of way or access, a right of drainage or a right to a water supply. By law the Seller must disclose all Latent Easements but not Patent Easements. Latent Easements are easements that could not be discovered by search or survey in other words they are not easily found out. Patent Easements are easements that can be discovered by search or survey.

Environmental Search – This is a search to check whether there are any environmental issues affecting a property, past and present land uses of the property and its surrounding areas - indicates the likelihood of contamination or pollution.

Equity – The equity in a property is the value that is left after you take the mortgage away from the current worth of the property.

Estate Agent –The Estate Agent acts on behalf of the seller to sell the property. They will prepare a set of details which must be accurate by law. 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 solicitor, the price and any specific terms which is sent to all parties to the transaction.

Estate Agents Account – These are the fees charged by the Estate Agent to sell the property

Exchange of Contracts – This is when the parties sign the contracts and then the solicitors “Exchange Contracts” normally on the telephone. If there is a chain the solicitors for everybody in the whole chain “exchanges contracts” at the same time using a Law Society formula. Once contracts are exchanged the sale/purchase is legally binding and neither party can withdraw without being in breach of contract.

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Fixtures and Fittings List – This is a list of items that will remain/be taken from the Property. This is completed by the Seller and a copy is sent to the buyer so that both parties understand what is included in the sale price. A copy is attached to each part of the Contract and is legally binding.

Freehold – With freehold land the owner owns the property/land outright subject only to any mortgages, charges, easements, covenants etc. shown by the deeds.

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Gazumping – This is where the Seller sells to another buyer for a higher price. 

Gazundering – This is where the Buyer lowers his offer on the property after agreeing a price. This can only happen before exchange of contracts.

Instructions – This means authorisation by the client to the lawyer. The client must give the lawyer written instructions to act on his behalf in the property sale, purchase, re mortgage or transfer. After that the lawyer will from time to time ask the client for instructions as to how the client wishes to proceed. For instance what date the client wants to move on.

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Joint Tenants – One of two forms of co-ownership whereby the property on the death of one of the co-owners, will pass to the survivors and will be owned in exactly the same way as if that person had purchased that property on their own, irrespective of the deceaseds Will or rules of intestacy.

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 – Searches are made at the Land Registry to check matters affecting the property such as easements and charges. On completion the new owner and any new lender are registered at the Land Registry. The Land Registry charges a fee for searches and for registration of property. 

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Lease – A lease is a 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 method of owning property (usually a flat) for a fixed term but not the land on which if stands. Posession of the property will be subject to the payment of an annual ground rent. When the lease expires, ownership of the property reverts back to the freeholder.

Listed Buildings – Listed Buildings are generally old properties protected by the Local Authority. Properties that are listed are subject to planning and building restrictions.

Local Authority Search – This is a search made by on behalf of the buyer or in the case of a re mortgage on behalf of the Lender. It covers items such as whether the road serving the property should be maintained by the council, whether there are planning applications on the property etc

Local Search Indemnity Insurance – This insurance is used on re-mortgages where there is no need to carry out a full local authority search and protects the Lender from financial loss. It is sometimes used on a purchase where there is insufficient time to make a full Local Authority Search if the Lender permits.

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Mortgages – This is a loan to help you buy the house. The mortgage is attached to your title deeds and you cannot sell the property without paying it off at the same time. If you are selling, we will contact your mortgage lender at an early stage to ask how much you have left to pay off your mortgage – we will send you a copy of this figure. You may find that you are liable for a financial penalty if you pay the mortgage off early.

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. This is removed when the mortgage is repaid.

Mortgage Offer – A written offer to lend money secured on a property. The Mortgage Offer will contain all the terms of the Loan and the conditions upon which the money is lent.

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. The Mortgage Valuer will not necessarily inspect the physical condition of the property.

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Professional Indemnity Insurance – The Law Society insist that all Solicitors firms must take out insurance to the value of £1,000,000 or more to cover defective work or fraud by that firm of its client(s).

Property Information Form – This is a standard form that is completed by the seller giving details about the property. It covers items such as neighbour disputes and boundaries. The form is legally binding on the seller.

Redeeming Your Mortgage – When a property owner pays back the mortgage on the property it is called redeeming the mortgage. You will first need to get a statement of what is owed which is called a Redemption Statement. If you are paying the loan back early you may be charged an Early Redemption Fee.

Re-Mortgage - Changing from one mortgage to another (usually from being offered a better deal)

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Searches – There are many different types of Conveyancing search. Which searches are needed for your property will be assessed by us. A brief list follows:-

• Bankruptcy Search – check to see if purchaser has been subjected to bankruptcy proceedings
• Chancel Search – a search to see if the property falls within an area which makes it liable for repairs to the local church
• Coal Mining Search – a search to see whether the property is subject to mining rights
• Commons Registration Search – to see whether the property is within the vicinity of land subject to adverse rights
• Company Search – a check to see if any company that affects the property is bona fide
• Environmental Search – to see if the property is subject to any adverse environmental conditions
• HM Land Registry Search – search to see if Seller has any charges on the property that have not been revealed
• HM Land Charges Search – search to protect the Proprietorship Register against adverse entries whilst awaiting registration of your title
• Index Map Search – undertaken to ascertain the Title No. of a property
• Local Search – undertaken to ascertain what applications have been made to the Local Authority that may affect the property
• Tin Mining Search – see Coal Mining above
• Water Authority/Drainage Search – check the drainage and water supply provision relating to the property

Stamp Duty Land Tax (SDLT) – A tax on land transfer levied by the Government and paid by the buyer. This may also be payable on the rent under a new lease.

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

Subsidence - Where a property moves due to inadequate foundations or recent change to the underlying ground which causes instability in the structure of a building, often evidenced by cracks in walls.

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 condition and value of the property. There are different types of survey, do not confuse a survey with a Mortgage Valuation. 

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Telegraphic Transfer Fee – This is a bank charge for sending money from bank to bank.

Tenants in Common – 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. (The other form of co-ownership).

Transfer Form – This is the legal document that transfers the ownership of the property.

Transfer of equity – A document transfering ownership of a share or interest in a property from one person to another.

Will – This is the legal document that sets out what you want to happen to your property after your death.

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