Conveyancing glossary:

Conveyancing glossary

Conveyancing is something every home mover needs to do, but it’s a process filled with complicated terms that many people either don’t understand or aren’t aware of. This handy glossary is designed to clear up conveyancing, from drainage to deposits, through to negative equity and beyond.

Agreement:

Another word commonly used for contract.

Breach of contract:

After each party have exchanged contracts, they are liable to breach said contracts if they pull out and don’t complete the conveyancing process. The non-defaulting party in this instance can legally seek reparations.

Caveat Emptor:

The translation for this ancient bit of Latin is “let the buyer beware”, meaning, the buyer is responsible for assessing the condition of a property using a surveyor.

Client care letter:

Your solicitor will send a client care letter that you need to sign and return. It should provide information on what services are included as well as a breakdown of the cost.

Commons registration search

These are checks carried out to make sure a property isn’t common land or part of a village green. If it is, the property will have third party rights over it.

Completion date

After full payment has been received and title deeds have been transferred from party to another, the conveyancing is legally completed.

Conservation area

If the property you want to buy resides in a conservation area, it is likely you may have to adhere to exterior planning restrictions in order to maintain the area’s look.

Contract

A legal document that should explain all the details relating to a property purchase including information on the property, the buyer, and the seller.

Conveyance

Standard name for the legal document that confirms the sale or purchase of a property or an area of land. It is more common these days for the property transfer to be done using a transfer deed/document.

Conveyancer

The name given to the individuals who complete the conveyancing process. Solicitors have traditionally done this, though recent years have shown specialists offering conveyancing as their dedicated service.

Council for Licensed Conveyancers (CLC)

This is the governing body that licenses and regulates conveyancers. Your conveyancers should be a member of the CLC; if they’re not, we advise you don’t work with them.

Covenant

Properties can have ‘obligations’ and ‘restrictions’ attached to them. Obligations mean you have to maintain something within your boundaries, whereas restrictions stop the construction of certain structures. Other terms for ‘obligations’ and ‘restrictions’ are ‘positive’ and ‘negative’ covenants.

Deeds

Deeds are the official documents detailing the official, legal owner of a property. Either they or the mortgagee holds the deed, with the latter holding it if the property is mortgaged.

Deposit

The buyer has to pay the seller, which is usually done via the conveyancer, on exchange of contracts. This is generally around 10% of the purchase price, though it can be negotiable with the seller.

Disbursements

These are fixed costs the conveyancer has to pay, such as local authority and bankruptcy searches, which are then passed over to you.

Drainage search

A check carried out during conveyancing to make sure the property is connected to fresh and foul water sewers.

Easement

Right of way over another person’s land.

Encumbrance

If your property has an issue that reduces its value or makes it less marketable, it is called an encumbrance.

Equity

This is the difference between your property’s value and the remaining figure owed to the mortgagee.

Exchange of contracts

This is the legally binding process of signing contracts and exchanging them between property lawyers. Once past this point, it is impossible to pull out of the transaction without possible legal consequences.

Fixture, Fittings and Contents form

Created by the seller’s property lawyer, this document explains what parts of a property are included in the sale (fixtures, fittings, and contents). The form must be completed and signed off before the buyer purchases the property.

Freehold:

Ownership of the property and the land it stands on. The owner of the land in a freehold agreement has no time limit on the period of their ownership.

Gazumping

Gazumping is where a seller verbally accepts an offer for their property from a buyer, only to then accept a higher offer from another potential buyer.

Ground rent

What the lessee (tenant) pays to the lessor (landlord)

Insurance Policy

Insurance designed to protect the buyer against problems caused by a defect in the legal title.

HM Land Registry

Government body responsible for managing ownership of property and land in England Wales. Scotland and Northern Ireland are not covered.

Index map search

The Land Registry conducts an index map search to see whether a premises is registered or unregistered.

Land certificate

When a property is registered, the Land Registry issues an official certificate.

Land Registry office copies

Your conveyancer will request this legal permissible document, which outlines who owns your property. It is usually held by HM Land Registry.

The Law Society

The representative body for solicitors in England and Wales.

Leasehold:

Possession of a leasehold property requires annual ground rent. When the lease expires, the ownership of the property returns back to the freeholder.

Leasehold property information form

This is the alternative to the Property Information Form (SPIF) and is used dealing with leasehold properties.

The Legal Ombudsman

If you are not happy with your chosen legal professional, you may submit a complaint to them. If the issue (or issues) has not been dealt with by your own solicitor within eight weeks, you may raise your complaint with the Legal Ombudsman. They are an independent and impartial complaints handling service.

Local authority searches

During the early stages of conveyancing, a local authority search will be carried out to ensure the property you move into does not undergo changes due to council plans. It is important to note that this only covers the legal boundaries of your new property. If you want a more comprehensive check, you will need to ask your solicitor to perform a ‘planning search’, which costs around £25 extra.

Management company

The organisation designed to make sure a landlord fulfils their obligation under a lease.

Mortgage

A loan from a bank or building society that enables you to buy a house you might not be able to outright pay for.

Negative equity

This is where the amount of money you need to pay for a property (generally via a mortgage), is more than the sale value of the property.

NHBC

The National House Builders Council provides 10 years’ warranty for new homes.

Occupier’s consent

When a person lives at a property but will not be signing the mortgage deed, occupier’s consent is required. This gives the mortgagee the power to evict persons now shown on the mortgage if the borrows can’t make repayments.

Office copy entries

Official copies confirming ownership of the property that you can obtain from HM Land Registry.

Power of attorney

A document that enables someone to represent somebody else legally, with their consent. This is commonly used to protect the interests (financial) of the ill or the elderly.

Pre-completion searches

Sometimes called priority searches, these are checks undergone by your conveyancing provider to see if you have been bankrupt and/or whether the property in question is owned by the seller legally.

Property Information Form

This is a form sellers need to fill in and return to their conveyancing provider. It is designed to check issues including boundaries, disputes, services, relationships with neighbours, legal rights, restrictions, and other essential information. It is an offence to provide incorrect information, so if you have any concerns speak to your solicitor.

Redemption settlement

The sum of money transferred to the mortgage lender if you decide to pay the mortgage back earlier. Be aware that you will be charged a penalty fee which covers the interest the lender will lose.

Reparations

If a contract is breached, compensation or renumeration (known as reparations) must be paid.

Reservation fee

A fee charged to the mortgagor when a fixed-rate mortgage is reserved.

Service charge

Any necessary repairs, maintenance, or improvements made to the property by the landlord must be paid for with a service charge.

Solicitor’s Regulation Authority (SRA)

If you have received and unsatisfactory service from you solicitor, the Solicitor’s Regulation Authority can be called to deal with it. They are an independent regulating body of the Law Society of England and Wales.

Stamp duty

Every buyer must pay stamp duty based on the price of the property they are purchasing. HMRC accrues the money.

Subject to contract

Often abbreviated to STC, subject to contract is a term used throughout contract negotiations to say nothing is legally binding, least not until contracts are exchanged.

Subsidence

When a property moves, or sinks, due to inadequate foundations, it is called subsidence. Subsidence is a massive structural issue that should be picked up by your conveyancer.

Tenure

Freehold or leasehold property ownership.

Third party rights

If someone other than the legal owner of a property has the right to use or control the land, they have third party rights.

Title deeds

A title deed is proof of ownership on a property. If you are still paying a mortgage, the lender will hold onto the title deed as the property is still legally owned by them.

Transfer deed

This is the document that legally transfers your property over to the buyer. You must have a witness present in order to sign it.

Transfer of equity

A document that transfers the ownership of a share or interest in a property from one person to another.

Wayleave agreement

The formal agreement between a service provider (energy, telephone, etc.) and a property owner, enabling the former to install infrastructure (piping or cabling) through or over the property.

Conveyancing without the paperwork