Bankruptcy Search: If you are taking out a Mortgage it will be necessary to check that you have not been made bankrupt at any time.
Chain: Sometimes a number of sellers and buyers are ‘linked’ so that their respective sale and purchases are all dependent on each other.
Coal Mining Search: This is a search which is carried out if the property is situated in a known coal mining area.
Completion Date: This is the date that the balance of the purchase price is paid, the ownership of the property is transferred and the keys are released by the seller to the buyer. The date is not fixed as agreed until Exchange of Contracts.
Contract: This is the formal agreement between the buyer and the seller which contains all of the essential details of the sale and purchase including the names of the parties, property details and the price.
Contract Race: This is when two parties have made an offer on the same house. The seller will sell it to the first party to exchange contracts.
Conveyancing: This is the term used within the legal profession to describe the process of transferring the ownership of a house or other property from one party to another.
Deposit: This is normally 10 per cent of purchase price which the buyer has to pay at the point of exchange of contracts. If a reduced deposit is agreed and the property transaction does not complete through no fault of the seller, then the buyer will be required to make the deposit up to the full 10%. In addition the buyer may have to pay compensation for any other losses which the seller suffers as a result of the matter not being completed.
Disbursements: These are the ‘'hidden'
costs of moving i.e. stamp duty, land registry fees etc. We
ensure that clients are fully aware of these costs at the
start of the transaction by providing a breakdown of costs
in our client care letter.
Drainage Search: This is often carried out to establish whether the property is on mains drainage and to identify the location of the water and drainage pipes.
Environmental Search: This is carried out
to find out about any environmental issues which affect the
property, such as flooding or contamination, which may affect
the value of the property and the level of building insurance
Exchange of Contracts: When both parties are ready to legally commit and a Completion Date is agreed, the two signed Contracts are dated and exchanged. The transaction becomes binding from this moment. Until this time, either party can withdraw from the transaction. The seller’s solicitor hands the copy of the contract to the buyer’s solicitor in return for the buyer’s signed part. Exchange is usually done by lawyers on the telephone.
Fixtures, Fittings and Contents Form: This is completed by the seller and identifies which items are being left at the property and which are being taken. This is sent to the buyer at an early stage so that any confusion as to what is included in the price and what is excluded can be avoided.
Freehold: This is the ownership of both the property and the land it is built on, and is therefore the highest form of ownership. A 'freeholder' may create leases in favour of other people or sell the property without usually needing the consent of anyone. There is no time limit on a freehold as with a leasehold property as the 'freeholder' and his heirs can own the property forever.
Gazumping: This is a practice by sellers when they accept a higher bid for their property than was previously agreed with another party.
Gazundering: This is a practice by purchasers of lowering their initial bid for a property than was previously agreed.
Ground Rent: This is a nominal sum paid by owners of long leasehold flats to their freeholder. Failure to pay this small sum could result in the forfeiture of the lease.
Joint Tenants: This is where two or more people jointly own a property. When one dies, his or her share automatically passes to the other(s). Joint tenants can only sell the property if all of the joint tenants agree.
Land Registry: This is a government body that retains records of who owns the land, and sets out details of any mortgages or other conditions/restrictions which may relate to the property.
Land Registry Fee: This is the fee payable to the Land Registry on Registration.
Land Registry Search: This is a search carried just before the Completion Date to ensure that the Title Deeds have not been altered since Exchange of Contracts.
Lease: This is a legally binding agreement by the freeholder or 'landlord' allowing someone else to occupy property for a defined period, provided they pay rent. Usually contains many other conditions with which the 'leaseholder' or 'tenant' has to comply or the lease can be terminated by the landlord. The tenant's rights under the lease can usually be sold on to a buyer, who then himself becomes the tenant for the remainder of the 'term'. If the Lease allows this, a tenant can create a lease himself in favour of a sub-tenant who will himself be the tenant's tenant. This is fairly common with business property and in larger cities.
Leasehold: This is the right to occupy a property for a given period of time, under the terms of a lease.
Local Authority Search: This is a search which is carried out at the local authority on behalf of the buyer. It discloses such things as planning applications, tree preservation orders, smoke control orders, demolition orders or tree preservation orders affecting the property, whether the road in which the property is situated is publicly maintained and whether there are any proposed major road improvements within the immediate surrounding area.
Mortgage: This is a long-term loan taken from a bank, building society or other lender to fund the purchase of the property. The mortgage is secured on the property and is registered on the Title Deeds which means that the property cannot be transferred or sold without the mortgage lender’s approval or until the mortgage is paid back in full. . Contracts should never be exchanged until a satisfactory mortgage offer is received, if the buyer needs one.
Mortgage Advance: This is the total amount lent by a lender under a mortgage. This might vary from the amount that the purchaser thought they were borrowing as lenders often make deductions from that amount.
Mortgage Deed: This is the document which confirms your acceptance of the terms of the Mortgage being offered by your lender. This is sent to the Land Registry and attached to the Title Deeds.
Mortgage Offer: You will receive this formal offer once your application for a Mortgage has been approved by your Mortgage lender. We will also receive a copy and the offer will include a list of questions and conditions that the lender will require us to answer and comply with before they will send the Mortgage monies to us. We strongly advise against Exchange of Contracts until this offer is received.
Mortgagee: This is the party who lends money to buy a property i.e. the lender.
Mortgagor: This is the party who is buying the house with the help of a mortgage i.e. the borrower.
Property Information Form: This is a form completed by the seller which gives practical information about the property such as which domestic utility services are connected to the property, ownership of fences, copies of central heating and double glazing guarantees. It also gives details of any alterations or extensions that have been made to the property. A seller is under a duty to truthfully disclose to the buyer any matters which affect the property.
Office Copy Entries: This is an official copy of the Title Deeds produced by the Land Registry.
Redemption Figure: This is the amount required to pay off your outstanding mortgage including any administration or penalty charges which your Mortgage Lender may impose as a result of early repayment.
Registration: This is the process of recording the change of ownership of the property or new Mortgage at the Land Registry once the transaction has been completed.
Remortgage: This is a new mortgage which is taken out to replace your existing mortgage, without moving house, often due to cheaper payments or to release equity.
Searches: Various searches have to be carried out if you are buying a property and include searches such as the Local Authority Search, Environmental Search, Drainage Search, Coal Mining Search, Bankruptcy Search, Land Registry Search etc.
Stamp Duty: This is a tax that has to be paid by the buyer. It is based on the price of the property purchased as follows:- £60,000 and less - no duty; £60,001-£250,000 - 1% of the price; £250,001-£500,000 - 3% of the price; £500,001 and over - 4% of the price.
Survey: This is what a surveyor is instructed to do to ensure that the property has no physical defects. Although a valuation may have been conducted by your lender, this only establishes that the price of the property is reasonable. A RCIS Homebuyer’s Report which is prepared by a qualified surveyor, will highlight any areas of concern and whether a full structural survey is required.
Telegraphic Transfer/CHAPS Fee: The fee charged by the bank for the electronic transfer of money required to complete the transaction.
Tenants In Common: This is where the property is held in specific equal or unequal shares. When one owner dies, their share of the property does not automatically pass to the surviving owners as with joint tenants.
Title: This means the right of the owner to the land
Title Deeds: These are the original documents which proves ownership of the property. If you have a Mortgage then the relevant bank or building society will have your title deeds. These will need to be obtained in order to sell or re-mortgage your property.
Transfer Deed: This is the final document which transfers the property from the buyer to the seller. This is sent to the Land Registry after the transaction has been completed for Registration.
Transfer Of Equity: This is about transferring your share of your property to someone else.
Vendor: This is another word for the seller of the property.