Whether you’re new to the conveyancing process, you’re remortgaging, or simply moving home we fully understand that there’s a lot of ‘jargon’ to get your head around during this process. From your ‘Covenant’ to your ‘Leasehold’ – there’s tonnes of terminology that quite frankly we don’t expect you to have learnt off by heart, that’s for us to worry about.
However, we appreciate that you might want to gauge an understanding of some of the typical conveyancing terms we use and that’s why we’ve compiled our A-Z guide to share the knowledge.
Agreement
The legal contract between the buyer and seller for the purchase/sale of the property is also referred to as the agreement.
Assent
This is the formal document required to transfer the legal ownership of a property or land to a person entitled following the death of the owner.
Basic fee
This is the fee charged by your conveyancer or property solicitor for their time in the sale and/or purchase of a property/land. With enact, this is a fixed fee and does not include additional costs i.e. disbursements. Many other firms will charge for their time rather than fixing a basic fee.
Breach of Contract
There are a number of ways contracts can be breached. In particular, once contracts have been exchanged, if either party pulls out and does not complete the conveyancing process they are in breach of contract and the non-defaulting party can legally seek reparations.
Brine search
A brine search will be carried out to establish if a property is affected by previous brine mining in the area.
Boundaries
In property law, there are two types of boundary: the legal boundary and the physical boundary. The legal boundary, which can be found in the land registry records or property deeds, is a line on a plan or a description of the area which divides one property from another. The physical boundary is any structure or barrier which separates one property from another such as a fence, wall or hedge.
Building insurance
Upon exchange of contracts, you will be required, by your mortgage lender, to take out buildings insurance on the property you are purchasing. This is to cover the cost of rebuilding the property in the event of it being destroyed as the seller’s policy will not cover you.
Caveat Emptor
This is the Latin term for ‘let the buyer beware’. It dates back centuries and means the onus is on the buyer for finding out the condition of a property using a surveyor.
Chain
A chain is when the buyers and sellers of a property are linked together because their sale and/or purchase are dependent on one another.
Charge
In property law, a legal charge is a debt secured against your house or another property that you own by a mortgage lender.
Chattels
Chattels are items of personal property that aren’t part of the fixtures of the property and can be removed independently. These are different from fixtures & fittings, which are things that are physically attached to the building/property.
Client care letter
This is an initial letter sent from a conveyancer/property solicitor to their client to confirm the scope of work to be carried out, a breakdown of costs, as well as their complaints procedure.
Coal mining search
For properties that are situated in an existing or former coal mining area, your conveyancer will conduct this search to identify if previous or existing coal mining activity will affect the property in the future.
Completion date
This is the final stage in the sale/purchase of a property. Completion is when the conveyancer or legal representative transfers the remaining funds to the seller’s conveyancer or legal representative, and the buyer takes ownership of the property. The keys are handed over, typically around lunchtime, and the buyer can move in.
Completion statement
Typically sent just before completion, this document gives a full breakdown of all the financials involved in the property purchase. The list is of all the remaining costs required on completion including conveyancing fees, disbursements and VAT etc.
Conservation area
If the property you intend to purchase is situated within a conservation area that is protected by a local authority, it may mean that there are some restrictions in place on the property to preserve the look of the area. This can mean that you have to apply for planning permission to make alterations to your property, where you usually would not.
Contract
Also referred to as the agreement, this is a legal document that sets out all details regarding your property purchase, including information on the property itself, the agreed price and details of the buyer and the seller.
Conveyance
This was the legal document that confirmed the transfer of a property or a piece of land from one person to another. More recently the transfer is conducted using a Transfer deed/document.
Conveyancing
The legal and administrative process of transferring a property title from one party to another. This is most often undertaken by solicitors or licensed specialists and is a necessity for most property sales taking place within the United Kingdom.
Conveyancer
A conveyancer is a legal representative who deals with the legal process of the transfer of property ownership.
enact are a firm of licensed conveyancers, which means we are regulated specifically to conduct property-related transactions.
Council for Licensed Conveyancers (CLC)
The Council for Licensed Conveyancers (CLC) is a regulatory body for Licensed Conveyancers in England and Wales. If instructing a conveyancer you should ensure they are a full member.
Covenant
These are contractual obligations or conditions, known as ‘positive’ and ‘negative’ covenants respectively, that can be attached to a property. For example, a positive covenant could be the obligation to maintain something such as a garden wall, whereas a negative or restrictive covenant prevents certain things ie. using the property for business.
Deeds
Deeds or title deeds are legal documents that officially states who owns and holds title to a property or land. Deeds are rarely required as the Land Registry now hold electronic records of property ownership.
Deposit
A deposit is paid to the seller, via the conveyancer, on exchange of contracts: this is normally 10% of the purchase price although is negotiable subject to agreement from the seller.
Disbursements
In addition to the basic fee outlined by your conveyancer, disbursements are additional costs incurred by your conveyancer to third parties. These include local authority fees, land registry fees, Stamp Duty Land Tax and more.
DIY conveyancing
Sometimes, if a property sale and/or purchase appears simple people decide to take on the conveyancing themselves as there’s not a legal obligation to appoint a solicitor or conveyancer. However, if you do choose to take on the conveyancing process yourself you should weigh up the benefits as well as risks involved by doing so. You definitely cannot do your own conveyancing if you are selling or buying with a mortgage.
Drainage search
To put it simply this is a search carried out during the conveyancing process to obtain information about sewer connections and water supply to a property.
Early Repayment Charge
If you decide to move home before your current mortgage deal ends or you decide to pay back your mortgage early you will incur a penalty fee by your mortgage lender. This is an additional sum of money to cover the interest the lender will subsequently lose out on, on top of the outstanding lump sum balance.
Easement
In property law, this is a right to cross or otherwise use someone else’s land for a specified purpose.
Encumbrance
An encumbrance can restrict the owner’s ability to transfer the title of a property or reduce its value.
Equity
This is the difference between the market value of the property and the balance outstanding to the mortgage lender.
Exchange of contracts
Exchange of contracts is a crucial part of any conveyancing process. It is the moment when the two parties become legally bound to complete the deal and past this point neither the buyer or seller can pull out of the transaction without possible legal consequences.
At this point, the buyer’s lawyer will confirm the amount of the deposit being handed over on exchange. This is usually 10% of the purchase price.
Fixture, Fittings and Contents form
Provided by the seller’s conveyancer, the fixtures, fittings and contents form sets out what is included and is excluded as part of the property within the sale. It also indicates to the buyer what is included in the purchase price and if the buyer is to pay extra for certain items such as curtains or a dishwasher.
Freehold
If you buy a freehold property you own the property outright until you choose to sell or otherwise dispose of the property.
Gazumping
This is when a person makes a higher offer for a property than a person whose offer has already been accepted by the seller and in turn, succeeds in acquiring the property.
Ground rent
If purchasing a leasehold property this is a regular payment charge paid to a landlord or freeholder, as required under a lease, typically in yearly amounts.
Indemnity Insurance Policy
Sometimes during the conveyancing process, an issue may arise, such as minor works carried without building regulations, and therefore indemnity insurance is used to cover the legal defect.
Yet, while the indemnity insurance policy covers the buyer and the mortgage lender in the event of any loss of value on the property as a result of the defect it’s usually the seller who pays for the policy.
HM Land Registry
HM Land Registry is the government body that registers the ownership of land and property in England and Wales
Index map search
The index map contains information on all land and property that are registered or being registered with HM Land Registry. This search will determine whether the premises are registered or unregistered.
Land Buildings and Transaction Tax (LBBT)
This is a tax applied to property transactions and is the Scottish equivalent to Stamp Duty Land Tax (SDLT)
Land Registry office copies
These are certified copies of the documents, held by HM Land Registry, outlining who owns a property, also referred to as office copy entries.
The Law Society
The Law Society is the representative body for solicitors in England and Wales.
The Law Society of Scotland
The Law Society of Scotland is the professional governing body for Scottish solicitors.
The Law Society of Northern Ireland
The Law Society of Northern Ireland is the regulatory and representative body for solicitors in Northern Ireland.
Leasehold
If you own your property on a leasehold basis, it means that you own the property for the duration of the lease agreement that you have in place with the freeholder. At the end of the lease period, ownership of the property returns to the freeholder, unless you extend it or buy the freehold from the landlord.
Leasehold property information form
This is a form completed by the seller of a leasehold property at the beginning of the conveyancing process.
The Legal Ombudsman
The Legal Ombudsman deals with all public complaints across the entire legal sector (not just solicitors). If you’ve made a complaint to your property law expert and it isn’t resolved within eight weeks you may then escalate your complaint to the Legal Ombudsman.
Local authority searches
These searches are conducted by your conveyancer during the early stages of your property-purchase process. There are two parts to a local authority search both of which investigate council plans and records that may affect your property once you’ve moved in and are required by your mortgage lender.
Management company
Is a company/organisation set up to manage the building of leasehold properties on behalf of the leasehold owner.
Mortgage
This is a loan of money from either a bank or building society to enable you to purchase a property. At minimum you will put down 5% of the property purchase price and the mortgage lender will loan you the rest of the money. You will then pay them back, monthly, at an agreed amount including interest.
Negative equity
An issue where the amount of money you owe on the property, usually via a mortgage, is more than the sale value of the property.
NHBC
The National House Builders Council provides a 10-year buildmark warranty and insurance for new homes.
Occupier’s consent
Your mortgage lender will ask of any person(s), who are living at a property but are not a part-legal owner of the property, to sign an ‘Occupier’s Consent form’. When purchasing a property you are expected to vacate the property if you cannot keep up with the repayments and it is consequently repossessed. By signing an occupier’s consent form the person(s) consent to vacating the property if in the event the property is repossessed by the lender.
Power of attorney
This is a legal document that allows a person to act as a legal representative of somebody else with their consent. These are often used to protect the financial interests of the ill or the elderly.
Pre-completion searches
Your conveyancer will order land registry pre-completion searches after contracts are exchanged to check nothing has changed with regards to your ability, as the buyer, to purchase a property. For example, a bankruptcy search to ensure you haven’t been or are about to be made bankrupt, or priority searches to check the title of the property hasn’t changed.
Priority searches
See pre-completion searches.
Property Information Form
This form, provided by the appointed conveyancer, is filled out by the vendor. It is a detailed document to give detailed information about the property from boundaries, planning applications, to neighbour disputes and the council tax band. It should be filled out as truthfully as possible as it’s a legally binding document and if the vendor is in doubt they should seek advice from their conveyancer.
Reparations
In the event of a breach of contract, reparations are compensation or remuneration claimed.
Reservation fee
In terms of a mortgage a reservation fee, or administration/booking fee is an upfront cost that covers the reservation of the loan while your mortgage application goes through.
A reservation fee can also be a fee paid to a builder or property developer to reserve a new property.
Solicitor
At the point of accepting an offer on your property or if you’re the buyer and your offer has been accepted you will instruct a solicitor, or a conveyancer, to manage the sale and/or purchase on your behalf.
Solicitors Regulation Authority (SRA)
The Solicitors Regulation Authority (SRA) regulates solicitors in England and Wales. Similar to the Legal Ombudsman you may seek advice for the SRA if you have a dispute or complaint with a solicitor.
Stamp Duty
For house buying in England, you will more than likely pay Stamp Duty Land Tax (SDLT) on top of your property purchase. The rate at which you pay will depend on a few things e.g. if you’re a first-time buyer, how much the property is purchased for etc. For properties in Scotland and Wales, you will pay a different tax.
STC
This is the abbreviation for Sold Subject to Contract.
Subject to contract
Up until the point contracts are exchanged this term is used during contract negotiations.
Subsidence
This issue occurs when the ground under your house collapses, or sinks lower, taking some of the building’s foundations with it. This puts a strain on the property’s structure as one side sinks, causing cracks to appear.
Tenure
Freehold or leasehold property ownership.
Third-party rights
When someone other than the legal owner of a property has the right to use or control the land of which they have no ownership.
Transfer deed
This is a document used in conveyancing to legally transfer the vendor’s property into the name of the buyer. It must be signed in the presence of a witness.
Transfer of equity
A transfer of equity is when a property owner wishes to add or remove a person(s) from the title of the home. This alters the ownership from a legal perspective.
