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Conveyancing Key Terms / Glossary

Read our conveyancing glossary to understand key terms around conveyancing.



Apportionment

This usually applies to transactions dealing with long leases where there may be arrears or overpayments of rent and service charge. The amounts due or overpaid will need to be ascertained as of the date of completion and then an apportionment can be made between the buyer and the seller.



Assent

An “assent” is a specific form of deed that is used in transferring the ownership of a property from a deceased owner to the beneficiary entitled to the property.



Assignment

The term used for the transfer of a lease, or rights or interests. The term is also used for the document that is used to make such a transfer. Bankruptcy Search: A search carried out by the buyer’s solicitors in the period between exchange of contracts and completion. The search checks that the buyer is not bankrupt.



Buildings Insurance

A buyer must make sure that buildings insurance is taken out which takes effect from the date of exchange of contracts. The insurance needs to cover all parts of any buildings and structures coming into the buyer’s possession. A buyer should also consider taking out contents insurance.



Building Regulations

Local Authority regulations that (unless an exemption applies) must be complied with when carrying out building works such as extensions, re-roofing, conversions, chimney breast removals, new heating systems, new windows/doors, cavity insulation, electrical works or removing walls. Building Regulations tend to be concerned with the safety or efficiency of the construction or the materials. They are completely separate from planning permission. The seller will need to supply the buyer’s solicitor with all necessary Building Regulations completion certificates (or appropriate Indemnity insurance) before the exchange of contracts.



Building Survey

This survey report (provided by a surveyor who is a member of the Royal Institution of Chartered Surveyors) gives a detailed report on the condition of the property and will usually assess the cost of repairing any problems discovered. It tends to be more expensive and more thorough than the other common type of survey report, the Homebuyer’s Report.



Chain

There can be said to be a chain where several parties must coordinate their move on the same day. A person moving house must sometimes complete on the same day as some other parties who are involved in buying or selling a house within the same chain of properties.



Chancel liability

A liability on some property owners to fund repairs to the chancel of their local church. It is possible to protect against this by taking out indemnity insurance cover.



Charge

A legal document that creates a financial burden that may be registered against the property to secure payment of monies (such as those loaned under a mortgage). The person with the benefit of the charge may be able to exercise a power of sale to recover the monies if the terms of the loan are not complied with.



Client care letter

This letter is sent together with our terms of business which contains a cost breakdown. The client care letter describes the service your solicitor will provide. The letter sets out the terms and conditions of business and you are only committed to using the solicitor once you have signed and returned this letter.



Completion date

The transaction relating to the purchase or sale of a house is completed. This will be the date on which you can move into a new home or the date on which you must give vacant possession of the house you are selling.



Completion statement

A statement provided by your solicitor detailing the monies to be paid by you to be able to complete the transaction. The statement includes the house purchase/sale price plus all other associated costs.



Contract

The legally binding agreement specifying the detail of the house purchase or sale. The contract legally commits both the buyer and seller to the transaction but it is not until contracts are “exchanged” that the contract takes effect. Amongst other things, the contract will fix the purchase price and the completion date.



Covenant

A legally binding promise either to do something (positive) or not do something (restrictive) concerning a property. For instance, a covenant not to erect any buildings or a covenant to pay a contribution towards the costs of maintaining a nearby path. Covenants are contained in leases and title deeds.



Deed Of Covenant

A document that is commonly required when transferring leasehold property. The deed of covenant sets up a direct contractual relationship between the new tenant, the landlord and/or the management company. It is designed to ensure that a new tenant complies with all of the terms of the lease.



Deposit

Often the deposit is thought of as part of the purchase price that the buyer is putting down in addition to the funds being provided by the lender. However, when solicitors talk about the deposit they are talking about the money that is handed over to the seller’s solicitors upon exchange of contracts. The deposit due on exchange of contracts tends to be 10% of the full purchase price.



Disbursements

Fees paid by the solicitors on the buyer’s behalf such as SDLT, land registry charges and search fees.



Drainage and water search

Enquiries of the water authority as to mains sewers and water pipes.



Easement

A legal right to use or access land or property owned by someone else.



Energy Performance Certificate (EPC)

An EPC is intended to inform buyers (or tenants) about the energy performance of a building. It is now law to have a certificate if you are selling or renting a property. Click Here to see if you currently have an EPC on the Register.



Envirosearch

A search providing site history and environmental information to buyers. The information covers a variety of risk factors such as land contamination and basic flood risk assessment.



Exchange of contracts

This is the point that both parties become committed to the transaction. The seller’s solicitors draw up two copies of the same contract and each party signs their own copy. When both parties are ready to legally commit the two contracts are dated and exchanged between the solicitors.



Fixtures and Fittings

A list of the items at the property which are either included with or excluded from the sale.



Freehold

Ownership of the actual land and any buildings which have been built on the land.



Homebuyer’s Report

This survey report (provided by a surveyor who is a member of the Royal Institution of Chartered Surveyors) covers building works safety and highlights problems as well as any areas which do not meet current Building Regulations. It tends to be cheaper and less thorough than the other common type of survey report, the Building Survey.



Indemnity insurance

The indemnity insurance is the insurance taken out by a property owner to cover potential losses resulting from problems that may arise from defects affecting the property.



Joint tenants

When two or more persons buy a property together it will be held in one of two ways, either as ‘joint tenants’ or as ‘tenants in common’. Joint tenants each own all the property. When one joint tenant dies, his interest disappears and since the survivor already owns all the property nothing passes or is transferred under any will. The survivor will be the sole owner of the property automatically.

Land Registry

The official body responsible for recording the ownership of legal interests in land. www.landregistry.gov.uk



Land Registry Search

The search is intended to protect the buyer of a property so that between exchange and completion the seller (or anyone else) will be unable to do anything which might affect the title of the property.



Leasehold

The ownership of property for a specified period (often in return for a rental payment and subject to terms and conditions). Sometimes a person might have a long lease of a property whilst also owning a share in the freehold (or owning a share in a management company that owns the freehold). This structure can give the person more control over the way that the management of the building is dealt with.



Local Authority Search

Enquiries of the Local Authority concerning matters such as planning and services.



Mortgage

A method of obtaining a loan to help you buy your house. The mortgage attaches to the title of the property. This gives the lender certain rights of security over your property and prevents you from selling the property without having first paid off the amount owing.



Mortgage deed

A mortgage deed is a legal document relating to the mortgage that will continue until the loan is repaid.



Mortgage valuation report

To secure a mortgage offer, you would usually have to pay for a mortgage valuation report. This should not be confused with a survey report – the mortgage valuation report merely confirms to the lender that the property is worth at least the amount they are lending to you and it is not their responsibility to point out any works that need to be carried out.



Office Copies

Also referred to as Official Copies this is a record held by the Land Registry detailing the extent of a property, its owner and the rights and obligations affecting it.



Planning Permission

Many alterations to property (such as extensions or change of use) require planning permission from the Local Authority. Planning permission tends to be concerned with the appearance or local impact of works that have been carried out. They are completely separate from Building Regulations. The seller will need to supply the buyer’s solicitor with all necessary Planning permission consents (or appropriate Indemnity insurance) before the exchange of contracts.



Redemption figure

The sum that the borrower needs to pay to the lender for the mortgage to be paid off in total and discharged.



Searches

A method of checking matters that may affect the property. The search ought to cover the property and not simply the surrounding area.



Stamp Duty Land Tax (SDLT)

A government tax payable in most cases by every buyer of a property.



Survey report

There are two main types of survey report – the Homebuyer’s Report and the Building Survey.



Tenants in common

When two or more persons buy a property together it will be held in one of two ways, either as ‘joint tenants’ or as ‘tenants in common’. Tenants in common each own a specified share of the property. When one owner dies, his share falls into that person’s estate and passes according to their will, or as on intestacy.



Title

History of the property and matters affecting the land. For instance, the title may contain entries relating to rights of way, covenants or mortgages that affect the property.



Title deeds

These documents provide proof of ownership of a property. They may also contain details relating to rights and obligations which affect the land. If you have a mortgage then your lender may be holding the title deeds. For those properties which have been registered at the Land Registry most of the information regarding the title to such properties will be contained in the Office Copies.



Transfer document (TR1)

The document that actually transfers the property from the seller to the buyer. This document is signed by both parties in advance but it does not take effect until it is dated by the solicitors on the completion date.



 

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