Here at Birchall Blackburn Law, we always try to communicate with you in a simple way, and without the use of legal jargon.  However, because conveyancing is a legal process, you are likely to come across some legal terms along the way.  We have listed below some of the more common conveyancing terms which will hopefully be of assistance to you.

 

Absolute Title

This is the best type of title to have. It means the title is classed as “absolute” which, in effect, means the title is as near perfect as it can be. This class of title can be given to either a freehold or leasehold interest in land. The proprietor of an interest which is registered with an absolute title has vested in them the legal estate, together with all appurtenant rights subject only to:

  • entries on the register
  • unregistered interests within the Land Reform Act 2002
  • interests of any beneficiary under a trust
  • where the land is leasehold, the express and implied covenants and obligations contained in the lease

 

Abstract of Title

A schedule listing the documents which set out the history of ownership of a property.

 

Adopted Highway

A road maintained by a local authority.

 

Advance

Mortgage loan

 

Adverse possession

Occupation of land inconsistent with the rights of the owner, without the permission of the owner.

 

Agreement

See Contract below.

 

Apportionment

The proportionate sum of money that a buyer or seller has to contribute or is entitled to receive.  This usually relates to Leasehold property where ground rent and service charges are payable for a specific period of time and will need to be apportioned because they are outstanding or have been prepaid to a date after completion.

 

Appreciation

This is the increase in the value of a property. This may be due to a number of factors, from a booming property market to home improvements or developments near to the property.

 

Arrangement fees

Fees which may apply to signing a particular mortgage deal. These are usually payable up front or simply added to the final loan amount. However adding them to the loan increases your mortgage debt, and so it’s always cheaper over the long term to pay these as a lump sum at the time of purchase.

 

Auction

The sale of a property to the highest bidder.

 

Bankruptcy Search

As it is an offence for a bankrupt to obtain credit, if a mortgage is involved, an appropriate search is made against the names of the buyer by the buyer’s solicitors.

 

Beneficial interest

The rights of a beneficiary in respect of property under a trust. It is a particular type of equitable interest.

 

Bacs Transfer

See below Bank Transfer.

 

Bank Transfer

This is the transfer of funds electronically via a bank.  In most cases this will be by way of either a Bacs (up to 3 day) transfer or a Chaps (same day) transfer. Funds are usually transferred by chaps transfer on completion in order to ensure quick movement and to avoid any delays in Completion or in the redemption of an existing mortgage.  An administration fee will be payable in respect of each transfer, and the cost of this will depend on which type of transfer is used.

 

Base rate

The interest rate set by the Bank of England.

 

Building insurance

Designed to cover homeowners in the event of re-building property following a fire, flood or structural damage. This does not cover the contents of your house (See Contents insurance).

 

Building Regulations

Building Regulations set standards for design and construction which apply to most new buildings and many alterations to existing buildings.

 

Building survey

See Survey below.

 

Buyer

This is the person buying a property, and is sometimes also referred to as the purchaser.

 

Caveat Emptor

This is a latin phrase which means “let the buyer beware.”  It is a legal principle that places on buyers the burden to reasonably examine property before purchase and take responsibility for its condition.

 

Chain

This is a scenario involving a series of connected sales and purchases, of which your transaction may be part.  Usually, the chain will start with a buyer who does not have a property to sell, and will end with a seller who does not have a property to buy.  A long chain can cause delay for the parties towards the end of it, when it comes to completion.

 

Chancel Repair Liability

This is an obligation on some property owners to fund repairs to the chancel of their local church.

 

Chaps Transfer

See above Bank Transfer.

 

Charge

This is an interest in the land securing payment of a debt (for example, a mortgage).

 

Chattels

These are items of property, such as furniture. They are normally excluded from the sale unless there are provisions to the contrary.

 

Common Law

Rules of law developed from the decisions of the courts of common law.

 

Completion Date

This is the date when ownership of the property is to transfer from the buyer to the seller. The completion date will be agreed when contracts are exchanged. On the agreed completion date the seller should receive payment and the keys are handed over to the buyer. If completion does not happen on the agreed completion date the party in default will be liable to compensate the other party.

 

Completion Statement

A written calculation of all the receipts and payments due in respect of the transaction.

 

Contract

This document sets out the details of the property, the parties involved and the terms of the conveyancing transaction including the price. It will also contain (sometimes in printed format, sometimes by reference to another document) the detailed terms and conditions applicable to the sale.

 

Contract Race

When the seller instructs their lawyer to issue contracts to more than one buyer. The aim is to get the buyers to race each other to be the first to exchange.

 

Conveyance

A document transferring ownership of an unregistered property from one person to another.

 

Conveyancing

The legal process of transferring property from one owner to another.

 

Co-owners

Where two or more people jointly own a property and are legally entitled to it.

 

Covenant

A promise contained in a deed (e.g. a clause in a lease). The person with the benefit is known as the covenantee, and the person with the burden is known as the covenantor.

 

Deed of Guarantee

This is a legal document which is used to confirm the position when one person guarantees the duties of another, usually in connection with a mortgage.

 

Deed of Grant

This is a legal document which gives specific benefits (for example, rights of way) to a property owner.

 

Deed of Postponement

This is a legal document which is used to confirm the position when one party postpones their rights, usually to a mortgage, in favour of another party.

 

Deed of Rectification

This is a legal document which corrects an error in an original deed or title document.

 

Deed of Variation

This is a legal document which changes the original terms of an original title document, usually a lease.

 

Deeds / Title Deeds

These are (or were) the documents that establish who officially owns the property. Most properties in England and Wales are now registered at the Land Registry so the deeds tend to be old or historic documents as the Land Register is the ‘evidence’ of who owns what. For leasehold properties, the most important deed is the lease. A packet of deeds sent to a buyer after completion and registration will often contain copy planning permissions and similar items that are often useful when the time comes to sell the property. All deeds should be kept in a safe place but only deeds to unregistered properties need to be stored securely in a fire-proof safe.

 

Deposit

This is a sum of money that represents the personal capital that the buyer is putting toward the purchase of the property.  A buyer should pay the seller 10% of the purchase price at exchange of contracts, although sellers often accept less than 10%. The rest of the purchase price is due on completion

 

Depreciation

The decreasing value of a property. This is usually attributed to a collapse in the UK housing market or issues within the local area.

 

Disbursements

Fees, such as Stamp Duty, Land Registry and search fees on top of conveyancing which you normally pay via your solicitor

 

Easement

This is a right over one piece of land for the benefit of another, for example a right of way. Easements can be created in a number of ways and may (but there again may not) be evident from the title deeds or the Land Register.

Energy Performance Certificate

An official document detailing the energy efficiency of a property which is a legal requirement in the sale of a residential property.

 

Environmental Search

A search against a property to check whether there is any record kept to suggest that the property may be affected by contamination.

 

Exchange (of contracts)

The contract between the buyer and the seller becomes legally binding when contracts are exchanged. In days gone by two pieces of paper would literally have changed hands. These days conveyancers generally exchange or ‘swap’ contracts by telephone. On exchange of contracts the deposit is generally paid and the completion date is set. Once contracts have been exchanged neither party is free to pull out without incurring a penalty (and these financial penalties can be substantial so no party should exchange contracts unless they are in a position to completion on the agreed completion date).

 

Equity

Usually means the difference between the value of a property and the amount owned to the mortgagee.

 

Execution

The process of signing, witnessing and attesting a deed.

 

Fittings and Contents Form (TA10)

This is the form the seller completes stating what items will remain in the property and what will be removed. A seller who completes a Fittings and Contents Form must do so carefully after reading the questions fully.

expired.

 

Flying Freehold

This arises when part of one property is built on top of part of another, and so the upper property owner does not own the building or land underneath the “flying” part.

 

Freehold

This is ownership of the land and any property on it essentially forever (subject to any leasehold or commonhold interests in the same property). If title is freehold with no leasehold interests the owner of the freehold is entitled to occupy the property for as long as they wish. If title is freehold but with an existing lease, the freeholder cannot occupy the property until the lease has.

 

Freeholder

This is the owner of the land on which the building is situated.

 

Full Structural Survey

A comprehensive Survey which usually includes a full inspection looking at all aspects of the building structure.

 

Full Title Guarantee

The seller of a property must state the guarantee they are prepared to give. This is the usual guarantee given by a property owner.

 

Gazumping

The practice by a seller accepting a higher price than that previously agreed with someone else.

 

Good / Possessory Title

This has the same effect as registration with absolute title, except that the proprietor is also subject to all of the adverse interests existing at the date of first registration. It will be granted where the applicant is in possession of the land and, for example, title deeds have been lost or there is a claim through adverse possession under the Limitation Act 1980.

 

Ground rent

This is the rent payable to a landlord, usually in relation to leasehold houses and flats where the tenant has paid a premium on the grant of the lease to cover the cost of the house and will effectively just be renting the ground on which it stands.

 

Ground Rent

This is paid by a lessee to a lessor where a property is leasehold and is usually expressed as a yearly sum.

 

Guarantor

A person that agrees to meet mortgage repayments of the borrower if the borrower is unable to meet the repayment deadlines for any reason. A guarantor is usually a parent or guardian and can significantly increase the amount a first time buyer can borrow.

 

HomeBuyer Report

Type of survey that is cheaper than a Building Survey. It rates the condition of all permanent structures included in the property, e.g. garages etc, highlights important problems that could affect the property’s value and includes a valuation.

 

Index Map Search

A search at the land registry to see if a property or piece of land is registered or unregistered.

 

Indemnity Insurance

Insurance to cover a defect in title or missing/lack of building/planning documents.

 

Joint Tenants

This is a form of co-ownership of a property where, if one owner dies, their share of the property automatically transfers to the other owner, even if a Will has not been made.

 

Land Charges Search

A search at the Land Charges Registry to see if a person has any bankruptcy proceedings pending or if the property is unregistered to find out if there are any mortgages or interests registered against the property.

 

Land Registry

This is the government department responsible for recording the ownership of registered land. The Land Register shows details of individual properties, who owns them and what rights or interests exist in or over them.

 

Land Registry Fee

The fee payable to the Land Registry to register any change affecting the property including a change of ownership.

 

Land Registry Search

A search at the Land Registry to check that no undisclosed charges or interests are registered against the property.

 

Landlord

See Lessor.

 

Lease

Where a property is leasehold this is the document giving the lessee the rights to possession of the property for the lease term and setting out all rights and obligations.

 

Leasehold

This is the owner of land for a temporary period. At the end of the term the property passes back to the owner of the freehold (or the superior leaseholder).

 

Leasehold Information Form (TA7)

This is completed by the seller of leasehold property and is in addition to the Property Information Form (and should be completed with the same level of care and attention).

 

Lender

See Mortgagee.

 

Lessee

Where a property is leasehold the lessee means the current owner of the leasehold property as opposed to the freeholder or landlord whose interest is subject to the lessees right of occupation until the lease term has come to an end.

 

Lessor

This means the landlord (usually the freeholder, although it may be a superior landlord) who is entitled to possession of the property at the end of the lease term.

 

Limited Title Guarantee

This is the title guarantee given by a seller where, because of their limited knowledge of the property, the full title guarantee cannot be given (e.g. a personal representative of a deceased owner or a mortgagee in possession).

 

Licence

(In land law.) Permission to enter or occupy land for an agreed purpose. The licensor gives such permission, the licensee is in receipt of the permission.

 

Mortgage

A loan to buy a house or flat where the mortgagee lends the mortgagor money in return for a legal charge being registered against the property to ensure that the loan must be repaid before the property can be sold.

 

Mortgage Deed

The document signed by the mortgagor to create a legal charge which the mortgagee can register at the Land Registry.

 

Mortgage Offer

The details of the terms upon which the mortgagee is prepared to make the mortgage loan.

 

Mortgage Term

The length of time agreed for the repayment of the loan.

 

Mortgaged

Where a property has been charged by the owner or mortgagor to the mortgagee.

 

Mortgagee

Somebody who provides a mortgage (e.g. a bank or building society).

 

Mortgagor

Somebody who takes out a mortgage (a borrower).

 

Mortgage redemption

Any mortgage secured on a property being sold must be paid off (or redeemed) at completion.

 

Negative equity

When the value of a property is less than the outstanding sum owed on a mortgage.

 

Occupier’s Consent

Any person who lives at the property but 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 takes possession due to the default of the mortgage.

 

Official Copies

These are official copies of the Land Registers sent to the buyer’s solicitors to prove the seller’s title to the property.

 

Overriding interest

A right or interest in registered land which is binding on the Registered Proprietor and third parties without being registered, e.g. the rights of persons in actual occupation of the land.

 

Party Wall

A wall owned jointly with a neighbour and repairable at shared expense.

 

Planning Permission

Approval by the local authority to the building or change of use of a property or extension to an existing property.

 

Power of Attorney

The document to be signed by somebody to appoint another to act as their attorney.

 

Private Road

A road maintained by property owners rather than by the local authority. The property owners need to have rights over it as it is not necessarily a public access.

 

Property Information Form (TA6)

This is completed by the seller and provides details of the property, including boundary information and addresses issues such as works carried out to the property. A seller who completes a Property Information Form must do so carefully after reading the questions fully. If information or copy documents are requested, the seller should provide these copy documents in order to avoid any delays to the conveyancing process.

 

Purchaser

See Buyer above.

 

Registration of Title

Title to a property has to be registered in the Land Register maintained by the Land Registry on completion of a purchase. Ownership and all important details of rights and liabilities are recorded on the register. The Land Registry charges a registration fee which varies according to the purchase price. The Land Registry’s website provides more information.

 

Rentcharge

Some freehold properties are subject to a rentcharge payable to the rentcharge owner. This may be to ensure income for the original land owner without the existence of a lease or it can be to ensure that estate covenants can be enforced more easily.

 

Repossession

When loans are in default the mortgage lender can repossess the property and sell it so they can repay the debt

 

Restrictive covenant

A covenant which imposes a restriction on the use of land.

 

Retention

Holding back part of a mortgage loan until repairs to the property are satisfactorily completed.

 

Searches

These are carried out to ensure there are no recorded problems with the property being sold. They include Local Authority Search, Environmental Search, Water & Drainage Search and Chancel Liability Search. Subject to the location of the property additional searches might be necessary such as mining etc.

 

Seller

Someone who sells a property.

 

Service Charge

A payment required by a lessor or managing agent to cover the costs of maintaining and running a development (e.g. gardening and decorating and also insuring a block of flats).

 

Shared equity

A scheme enabling buyers to buy an equity share in a property with the aid of a mortgage, while the developer/housing association owns the remaining share. The developer/housing association would be entitled to their share of the equity of the property in the event it is sold at a later date.
Shared ownership

A scheme allowing buyers to purchase a property for as little as a 25 per cent share in a property. The rest of the share is paid over time in the form of subsidised rent.

 

Smoke Control Order

An order made by the local authority designating an area to be one in which only smokeless fuels may be burnt (i.e. not coal or wood).

 

Stamp Duty Land Tax

This is a tax payable on purchase of land over a certain price. Stamp Duty Land Tax (or SDLT) is paid to and collected by HM Revenue & Customs.

 

Staircasing

Applies to first time buyers within shared equity mortgages who ‘top up’ the number of shares they own in their part-owned, part-rented property until they own all shares outright.

 

Standard Conditions of Sale (Fifth Edition)

These are the standard conditions incorporated into most contracts for the sale of residential property in England and Wales. They are designed to strike a fair balance between the interests of a seller and buyer.

 

Statutory Declaration

A formal statement about a property witnessed by a lawyer. It is used to support a claim where there is no formal evidence (for example, about a right of way).

 

Subsidence

Where a property moves due to inadequate foundations or severe change to the underlying ground. This results in an instability in the structure of a building often evidenced by cracks in walls.

 

Survey

This is a report based on a physical inspection of the Property which may flag up problems with the property’s construction or condition.  See below Full Structural Survey and Homebuyer Survey.

 

Tenant

People living in a property owned by someone else.  Please also see Lessee above.

 

Tenants in Common

This is a form of co-ownership of the property. It allows co-ownership – therefore where one owner dies, their share of the Property passes to whoever is specified in the will. Note it does not automatically pass to the other owner unless this is stipulated in the Will.

 

Title Information Document

Document issued by the Land Registry on completion of an application for registration confirming the ownership of the property and any mortgage.

 

Title Plan

The Title Plan, based on the Ordnance Survey, shows the physical extent of the Property. The Title Plans are to scale but are not detailed enough to establish boundary positions so cannot be relied upon in the event of a dispute.

 

Transfer Deed

This is the document formally transferring the ownership of the property from the seller to the buyer. Most transfer deeds follow a standard format and are often on forms called TR1.

 

Transfer of Equity and Deed of Gift

A transfer of equity is the transfer of one owner’s share of a property to the remaining owner, and which may be covered by an existing mortgage. A deed of gift is when no payment is made for the share.

 

Trust

A transfer of property to trustee(s) for them to hold it for the benefit of another person(s).

 

Vacant Possession

This literally means that there is no tenant or other person in possession or occupation of a property. So if a property is sold with vacant possession the buyer should be able to move in straight away. If a seller sells a property with vacant possession the property should be substantially clear of all chattels, furniture, rubbish and the like on completion.

 

 Valuation

A very simple form of survey designed to establish the market value of the property.

 

Vendor

The legal name sometimes used to describe the Seller of the property.