Jargon Buster at Hackney & Leigh

Legal Jargon Buster

A

Abstract or Epitome of Title – a summary or list of relevant title deeds proving the history of ownership of a property.

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.

B

Base Rate – the rate of interest set by the Bank of England upon which most other interest rates are based.

Bankers Draft – a cheque like payment which is guaranteed after a short fund clearance time.

Bankruptcy Search – if you are taking out a mortgage against the property you are purchasing then the lender will request that your solicitor carries out a search to ensure you are not bankrupt.

Building Insurance – buildings insurance provides cover for you in case something happens to the property you are purchasing (a fire for example). In conveyancing transactions in England and Wales you are often responsible for building’s insurance from exchange of contracts (not completion).  It is important to have an appropriate level of cover in place from this date. The policy value should be able to meet any costs involved in rebuilding the property, rather than the current property value.

Building Regulation Consent – approval by the local authority to the method of construction and materials used in building work.

C

Cashback – a sum of money (paid by cheque) by the Lender on completion of a mortgage (but only if this arrangement formed part of the mortgage offer).

Chain – a position in which Seller 1 sells to Buyer 1 and Buyer 1 sells to Buyer 2 etc. thus creating a chain of connected transactions.

Client Care Letter – the client care letter details the level of service you should expect from the firm handling your conveyancing matter. Until you have signed and returned a client care letter to a solicitor you have not instructed them, and are under no obligation do so just because you got a quote from them.

Commons Registration Search – a search to ensure the property is not registered as common land or part of a village green.  If it is, then other people may have rights over the land concerned.

Completion Date – this is the date upon which the buyer (or the buyer’s solicitor) will transfer payment for the property to the seller, and also receive the keys to their new property. The seller hands over the keys to the property (usually through their estate agent) and the sellers solicitor transfers payment for the property (minus and deductions for fees or disbursements due) to the seller.

Completion Statement – this is a full breakdown of the financial costs incurred in purchasing a property and will be provided by your solicitor. It states the total amount of money your solicitor needs from you in order to complete the purchase of your chosen property on your behalf.

Contract – the contract is a legal document that sets out the terms of the conveyancing transaction and the parties involved, and is drafted by the seller’s solicitor.

Contents Insurance – contents insurance provides cover for the cost to replace any items located inside your property, if they are lost due to fire or theft. It is recommend that if you have anything of value in your property, that you have cover in place from when you take possession of the property at completion.

Contract Pack – the contract pack is a collection of documents and information relating to the property being sold. It is compiled by the seller’s solicitor and contains key details including: draft contract, copy title deeds, a completed property information form (completed by the seller) and a fixtures and fittings form (completed by the seller). The contract pack is forwarded to the buyer’s conveyancing solicitor so he may investigate the seller’s legal title over the property.

Conveyance – a document or deed used to transfer ownership of an unregistered property from the Seller to the Buyer.

Conveyancing – the legal process used to buy and sell land and property.

Covenants – rules/regulations governing specifics that can /cannot be carried out in the properties title deeds or lease/leasehold agreement.

D

Deed of Covenant – a document or deed containing an agreement to pay or do something.

Deed of Gift – a document or deed used to transfer ownership of property from one person to another without any payment being made.

Deed of Guarantee – a document used where one person agrees to be responsible for someone else’s debt or mortgage obligations should that person fail to carry out his/her own obligations.

Deed of Postponement or Priority – where a Lender agrees that its mortgage will rank or take effect in priority after another lender’s mortgage.

Deeds – documents which establish ownership and confirm the Owner’s title to the property.

Deposit – this is the amount of money the buyer will pay to the seller on exchange of contracts. The standard deposit is 10%, however if you are buying and selling your solicitor can usually use your buyers deposit for your purchase without the need to find a deposit in cash.

Disbursements – these are additional costs incurred during a property sale or purchase, and include things such as stamp duty and search fees.

Drainage Search – this search shows the location of drains and sewers located near or on your property and whether or not surface water and/or foul water drains run into a public or private sewer.

E

Environmental Search – it is recommended that environmental searches are carried out on any property you are purchasing. These searches identify whether there are any landfill/waste disposal sites in the area, if your property has been built on an old industrial site, and whether there are any risks from the land your house is built on being contaminated or having toxic emissions, for example if your property is situated in an area with high levels of radon. Environmental searches should also identify if your property may be susceptible to flooding or subsidence as a result of mining.

Equity – refers to a person’s asset value or in respect of property, the net value of a property after mortgages or other charges are paid off.

Estate (Wills) – usually refers to the value of the assets of a deceased person  including the house, Car, Investments or Bank Accounts and anything else you own in your sole name.

Exchange of Contracts – it is at exchange of contracts that a conveyancing transaction in England or Wales becomes legally binding. Until this point either party can pull out of the conveyancing transaction. Identical copies of the contract are signed by both parties and exchanged, usually by the solicitors for both parties. The deposit is also passed from the buyer’s solicitor to the seller’s solicitor for them to hold until completion – the deposit is non-refundable.

F

Fees – this is the charge levied by your solicitor to complete your conveyancing transaction. VAT will be payable on any fees, and it is worth noting that disbursements may also be payable in addition to any solicitors fees. Always ensure you obtain a full conveyancing quote including all fees and disbursements before instructing a solicitor.

Fixtures, Fittings and Contents Form – a standard form in which the Seller specifies items in or affixed to the property which are included in the sale at the agreed price.

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.

Freehold – ownership of the land upon which the property is situated on.

Freeholder – the person who owns the freehold.

Full Title Guarantee – the standard guarantee given by an absolute owner to the Buyer.

Further Advance – an additional amount loaned to an Owner after completion on broadly the terms of the original mortgage.

G

Ground Rent – this is the rent paid by a lessee to a lessor where a property is leasehold. It is often paid yearly.

H

Home Buyers Report – one of a variety of valuations and surveys which may be undertaken on behalf of a lender.

I

Index Map Search – a search at the Land Registry to see if a property is registered or unregistered.

J

Joint Equity / Venture – usually refers to a situation where two or more parties together invest in a property or venture.

Joint Tenancy – a form of joint ownership of land when two or more parties share the ownership of the whole title to the property. If one party dies, then the survivor/s will own the whole property.

L

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 Search – this search determines the current ownership of the property and checks that there are no mortgages registered against the property that have not previously been disclosed. If a mortgage is in place the buyer’s solicitor will obtain confirmation that the mortgage will be repaid.

Local Authority Search – this looks at the planning history of the property and whether the Council are aware of any breaches of in planning permission. The search also checks for proposals for any new traffic schemes and roads that could affect the value of your property, as well as for anything else of interest such as conservation areas and smoke control orders within the Council’s control that affect the property.

Land Registry – an organisation controlled by central government which maintains a register of properties and their ownership in England and Wales.  It now covers approximately 90 – 95 percent of residential dwellings. The Registry records the prices that properties are sold for.

Land Registry Fee – the fee payable to the Land Registry to register any change in the property details including a change of ownership

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.

Lender – a Bank, Building Society or other person or company who lends money to an Owner.

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.

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.

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.

LPA – means Lasting Power of Attorney.

M

Marital Home – a property where the married couple lives or have lived – usually referred to in Divorce Cases.

Mining Search – a search to check whether the property may be affected by past or present coal mining and, in particular, the risk of subsidence.

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.

N

Negative Equity – this refers to the situation where the value of the property is less than the amount required to pay off any mortgage or charges etc.

O

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.

P

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.

Private Road – a road which is not an adopted highway and accordingly not maintained at public expense.  Property owners need to have particular (and preferably documented) rights over it as it is not necessarily a road which offers public access.

Probate – the process of ‘Proving’ a persons will to enable a deceased person’s estate to be dealt with.

Property Information Form – this is a questionnaire about the property that the seller is requested to complete by their solicitor. It asks for details about the property such as details of current utility providers, boundaries, fixtures (such as double glazing) and planning permissions.

R

Radon Gas Search – a search to see if the property is affected by naturally occurring gas which may if above certain safety levels, require preventative action to be taken (e.g. more ventilation in a property).

Redemption – the repayment of an existing mortgage or loan.

Redemption Penalty – a penalty payment charged by a Lender if a loan is repaid within a period specified in the mortgage offer (some loan products only).

Redemption Statement – this details the amount it will cost you to pay back your mortgage early, and is usually made up of the amount of money you owe the lender along with a penalty for the early redemption of your mortgage.

Registered Land – property which has been registered at HM Land Registry.

S

Service Charge – a payment required by a Landlord (or managing agent) to cover the costs of insuring and/or maintaining a development or block of which the property forms part.

Shared Equity – similar to Joint Equity  but often used in a situation where a “Shared Equity Scheme” provides a loan which acts as  part of a buyers deposit in a property purchase. There are government or Housing Association Schemes available to provide this type of purchase but not all Lenders will accept applicants.

Stamp Duty – ‘Stamp Duty Land Tax’ a tax paid by purchasers, the amount payable depends on the value of the property. [Click here] for more details and current rates.

Subsidence – where a property moves due to poor construction or ground movement for geological reasons.

T

Tenancy in Common – another type of property ownership, in which separate owners each have a share in a property which would form part of a person’s estate and would not automatically pass to the other party/ies – unlike a ‘Joint Tenancy’.

Title – an owner’s actual right of ownership (whether or not the owner is in occupation).

Transaction – a dealing with property (e.g. sale or purchase or re-mortgage).

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.

U

Undertaking – a promise which can be enforced by law. For example, a ‘Solicitors Undertaking’ which would assure a buyer that a seller of a property would pass monies from a sale to a third party.

Unregistered Title – a title to a property which has not been registered at the Land Registry.  The title will consist of old style conveyances and other documents.

V

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.

Vendor – an older word for Seller.

W

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.

Beware:

The word meanings in this glossary are necessarily basic and are 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 your solicitor or conveyancer for appropriate advice.