Read a list of helpful terms you will come across when buying or selling your home.
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Whether you are buying or selling your home, you will need the help of an experienced conveyancing solicitor. Some of the terminology can be confusing so here’s a helpful list of some of the common terms used during the process.
This is applicable when buying a leasehold property where ground rent and service charge are payable. If the seller has paid for a period which goes beyond the completion date then the buyer will pay the seller for anything due back to the seller from the completion date. For example if the service charge is £100 for the period 1st May to 30th June and completion takes place on 30th April then the buyer will pay the seller the apportioned figure due from 30th April to 30th June for their share of the service charge
An Article 4 Direction is made by the local planning authority and it will restrict the scope of permitted development rights to a property.
Some works to properties require consent from the local council’s building control department even if they don’t require planning permission. Typically, consent is given before work starts. The council may inspect the work at various stages and again when it is complete. If the work is carried out satisfactorily, the council will issue a Completion Certificate or Final Certificate. This stage is often overlooked.
You are required to take out buildings insurance, upon exchange of contracts, and this covers the cost of repairing damage to the structure of your property.
This is another name for the purchaser
This is a latin phrase which means ‘let the buyer beware’. This means that it is the responsibility of the purchaser to carry out his/her own investigations/searches to be satisfied with the condition and title of the property.
A transaction where there is more than just one seller and buyer.
This is land which is owned by one person or collectively and where other people are entitled to use the land.
Commonhold is an alternative to the long leasehold system. It allows you to own the freehold of individual flats, houses and non-residential units in a building or on an estate.
The point at which the property is sold. I.e. the buyer pays for the property and the seller transefers title to the buyer. This is usually the date the buyer moves into the property.
These are areas of historic and architectural interest with planning restrictions on the changes that can be made to buildings, greenery and street furniture within an area.
In a house or flat purchase contexts this is an agreement to buy, sell or lease land.
This is when a seller has accepted two or more offers from buyers on a property. The seller will usually sell to the party who is in a position to exchange contracts first.
An obligation to do something or not do something usually found in a deed such as a lease or transfer of a property.
This is the sum of money paid on exchange of contracts and is usually 10% of the purchase price. The seller can agree to a smaller deposit to be paid on exchange of contracts however if there is any default of the contract then the deposit will need to be made up to 10%.
Conveyancing disbursements are the payments or taxes that need to be paid to a third party during the course of the conveyancing transaction.
The ERP is a fee required to pay to a lender if you repay your mortgage or loan before the expirey date of the mortgage product.
A right a land owner has over another property. An example would be a right to pass over the property (a right of way) or a right to use utilities such as electricity cables.
This is the Energy Performance Certificate and gives details of the energy efficiency of a property and how it can be approved. A property can not be sold without a valid EPC although there are exceptions such as listed buildings.
A schedule of all the documents of title, together with photocopies of the documents themselves.
The point at which the buyer and seller enter into a contract for the sale and purchase of a property.
This form is completed at the start of the transaction by the seller in which the seller makes it clear to the buyer which fixtures and fittings in the property are included or excluded from the sale price.
A flying freehold describes where part of a freehold property lies above another property, such as a room above a shared passageway, or a balcony. This may or may not be clearly marked on property deeds.
Ground rent is a yearly sum of rent paid to the landlord under the terms of the lease.
This is a government backed scheme which aims to help first time buyers onto the property ladder.
Sometimes defects are found with property titles. It may be difficult or impossible to resolve the defect. Indemnity insurance can offer a quick and cheap solution. A single premium is paid to a specialist insurance company and provides cover for many years or sometimes forever.
This is a type of ownership for more than one person. The main feature of joint ownership is title to the property automatically passes to the survivor should one of the joint owners die.
A government department responsible for keeping records of ownership of nearly all land in England and Wales.
LTT replaced Stamp Duty Land Tax (SDLT) in Wales from 1 April 2018.
An agreement to take ownership of a property for a fixed term of years (e.g. 99 years). Nearly all flats in England and Wales are held under a lease.
This form is usually completed by the seller in a leasehold property sale and contains information about the ground rent , service charge and lease in general.
This form is completed by the Freeholder Landlord or Management Company in connection with any leasehold property sale and contains information about the service charge , ground rent , buildings insurance , fire risk assessment, asbestos surveys and also provides details of any major expenses that may be upcoming in connection with the maintenance of the building as a whole.
This is another name for a Tenant under a lease.
This is another name for a Landlord under a lease.
Limited knowledge of a property, resulting from missing documents or unclear ownership, will result in a seller giving only a limited title guarantee. The reasons for, and likely consequences of, a limited title guarantee vary, and a solicitor will advise accordingly.
A property which is included on a list of buildings which are of architectural or historic interest. Listed building status may restrict any alterations to the building.
A mortgage deed is a document that contains all details concerning the loan given including the parties involved, details of the property kept as collateral, the loan amount, interest rate payable and more.
Negative equity occurs when the value of a mortgaged property is less than the remaining balance of the mortgage.
A warranty issued to the buyer of a brand new property. NHBC is the largest provider of warranties but other providers exist (e.g. Premier Guarantee).
National House Building Council. This is a trade body representing many housebuilders. They also issue new home warranties for many new properties. They are the largest issuer of warranties but they are not the only issuer of warranties.
These are electronic copies of the deeds for the property which are held at the land registry. Generally electronic copies have replaced old paper deeds.
This allows certain building works to be carried out and changes of use to a property without having to obtain planning permission. These rights are not always available in conservation areas or with listed buildings.
Consent to physically change a property or to change its use. The proposed works may also require Building Control consent.
This form is completed by the seller at the start of the transaction and is a series of questions that gives the buyer more information about the property.
This is the amount it costs to repay your existing mortgage.
The act of registering a transfer of a property from the name of a seller to a buyer at the Land Registry.
A rentcharge is an annual sum paid by a freehold homeowner to a third party (“Rent Owner“) who normally has no other interest in the property (“Charged Land”). A freehold development will usually have communal areas (such as a playground, private roads and a car park) which may be managed by a management company and this is usually what the rentcharge is used to maintain.
A rentcharge is an annual sum paid by a freehold homeowner to a third party (“Rent Owner“) who normally has no other interest in the property (“Charged Land”). A freehold development will usually have communal areas (such as a playground, private roads and a car park) which may be managed by a management company and this is usually what the rentcharge is used to maintain.
An obligation not to do something. An example might be not to carry out a particularly activity on a property such as using it to sell alcohol.
Standard enquiries made of various bodies such as the local council (known as the Local Search). There are many different types of searches and not all are necessary for all properties. Other searches include Drainage and Water Searches, Environmental Searches, Mining Searches and many others.
This is a payment for leasehold properties usually collected by the management company which is used to maintain/repair common parts and provide certain services to the leaseholders.
This is when a buyer buys a percentage share of the equity in a property usually from a housing association and they pay rent in respect of the remaining share they do not hold.
A sinking fund is an amount of money which is set aside to cover any major work which is needed on a property in the future.
When further additional shares are acquired in a shared ownership property.
A tax on the purchase or leasing of land paid by the buyer usually on completion of the purchase.
The Sublandlord is a person who has a lease with the original Landlord, and who is now leasing all or part of the property under the Lease to the Subtenant. Also known as a Head Leassee.
This means that there is already a tenant living in the property and the buyer will buy the property with the tenant remaining.
This is a type of ownership for more than one person. The main feature of tenancy in common is that on the death of an owner, title to the property passes to according to the terms of the deceased’s will, or the intestacy rules should the deceased die without a will.
This is a copy of the electronic plan held for the property which shows the land owned by the seller and this is usually shown edged red.
This is the instrument which is used to record the transfer from the seller to the purchaser.
A person who obtains a transfer or conveyance of property (typically the buyer).
A person who makes a transfer or conveyance of property (typically the seller).
A lease that is not held directly from the freeholder, but from a tenant.
A small minority of properties are not registered at the Land Registry. This means that title to the property is proved by holding the paper title deeds to the property. It is common where the property has been in the hands of the same person for many years. When the property next changes hands, the buyer’s solicitors will register it at the Land Registry. It will then be permanently registered.
This means that the property will be handed over to the buyer on completion free of any occupiers.
This is another name for a seller.
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