Conveyancing Jargon Buster

We know that sometimes property lawyers and conveyancers use words or phrases which not everyone understands, which is why we’ve put together this conveyancing glossary. This page sets out some of the things your solicitor might say along the conveyancing process, so that you understand what they mean. If you have any questions just call: 0800 038 7007

CHANCEL REPAIR

In some properties the legal documents require that the owner contribute to making repairs to a local church. This can be very expensive. In the future all chancel repair liabilities will be registered so it is clear what the situation is. Presently, however, conveyancing solicitors sometimes advise that insurance be obtained to cover the risk where it may arise.

CLIENT CARE PACK

After you have instructed a solicitor through Best Value Conveyancing, they will send you terms and conditions and details of what they need from you before they can open a file and commence work on your behalf. We will send your instruction to the best solicitor to work on your file, and from there you are looked after by your case handler.

COMPLETION

This is the day your sale or purchase actually finalises. The day you have no doubt been looking forward to. This is the day the money changes hands and you pass over or receive your keys. If you are selling your house, you have to give vacant possession on the day of completion, usually by 1pm. If you are buying, you gain vacant possession. You might also have rather a lot of boxes to move. Why not sit down, order a take-away, and have a beverage of your choice!

CONTRACT

The written agreement for sale or purchase. This document contains all of the key details of the sale or purchase and includes numerous standard terms. It does not become legally binding until exchange of contracts.

CONVEYANCING

Conveyancing is the legal side of dealing with property transactions. It covers the entire process of scrutinising the documents to make sure that the property can be sold, and if it is sold that it will properly become yours, as well as advising on rights and liabilities and any other risks. All conveyancing done by Best Value Conveyancing is handled in accordance with best practice and we only work with solicitors and conveyancers regulated by the SRA or CLC.

DEPOSIT

Most people understand this to be the amount of money which the purchaser has to fund themselves – the difference between the price of the property and the mortgage advance. Solicitors and conveyancers use this term to refer to an amount paid on exchange of contracts, often 10% of the purchase price. If you’re unsure it’s best to discuss this with us.

DISBURSEMENT

These are amounts which your solicitor has to pay out in the course of conveyancing. Examples include fees payable to undertake searches. Solicitors and conveyancers don’t have much choice about how much is payable, but they do try to keep the amounts low. Disbursements are sometimes a cause of confusion, and that’s why we’ve put together this conveyancing glssary. Please call us if you have any questions about disbursements: 0800 038 7007.

ENERGY PERFORMANCE CERTICATE

One of these should be obtained before a property is marketed for sale or rent. It is a document which sets out how energy efficient a property is and identifies areas for potential improvement.

ENVIRONMENTAL SEARCH

This is a check to make sure that there are no environmental issues affecting your proposed property. These may include landfill sites, old industrial contamination, flooding and other such issues. Because these searches are conducted online your solicitor can usually get an answer very quickly. Sometimes the environmental search will indicate that other more specialist searches are conducted, for example for old mine workings which may cause subsidence.

EQUITY

In this context, short for “equity of redemption”. This means the amount of value in the property which is not covered by an outstanding mortgage debt. If you have a property worth £250,000 and a mortgage debt of £100,000, the equity is £150,000, because if you sold the property and used the proceeds to pay off the mortgage you would have £100,000 left over.

EXCHANGE OF CONTRACTS

This is the point your transaction becomes legally binding and that you enter into a binding agreement. Up until that point, either party can withdraw without being in breach of contract. Exchange is done by your conveyancer, usually by telephone, and the terms of the contract are checked with the other conveyancer acting for the other party to ensure that both are identical. A completion date is inserted, a deposit agreed upon and the terms of the contract finalised. Your conveyancer at Best Value Conveyancing will always ring you before exchange of contracts. Exchange is very important because once it takes place everyone is committed to the purchase.

FORMS

The forms you’ll see at an early stage are the Fixtures, Fittings and Contents form, and the Property Information Form. Together these documents cover most questions any responsible purchaser would want to ask of their seller, ranging from what items or decor are remaining with the property, to issues about access rights and shared driveways. If you’re a seller you’ll be asked to complete these honestly and fully at an early stage in the process, whilst if you’re a purchaser you’ll be interested to read the answers. Solicitors for both sides will consider the answers carefully and more questions may arise from what is written.

FREEHOLD

This means that a purchase of the property buys the property itself and the land it stands on, usually absolutely. Although the legal situation may be more complicated (only really with very substantial older properties) this usually means that once the property has been bought it can then be possessed, inherited and generally passed on until it is sold to someone else or the interest changes in some other way. This is different from a leasehold property, where the land is owned by another party and you buy the right to possess the property on the land for a limited period of time.

INSURANCE

Insurance is important in many different ways, and offers some security if things go wrong. In some circumstances your conveyancing solicitor may advise that you take out special insurance, for example if you are in an area where you may be required to repair a local church because of obligations in your property deeds. Insurance covers you for the risk of certain events arising.

LAND REGISTER

The Land Registry maintains a register of properties, although not all properties are registered (yet). Properties on the register have certain important details listed, such as the last sale and details of the owners and any mortgages. In the course of advising you, your solicitor will obtain or view a copy of the registry entry.

LEASEHOLD

This is another form of legal tenure, and is different from freehold. It means that you buy a right to the property temporarily but do not own the land it stands on. As an example you might buy a 99 year lease to a flat in a block of such flats. The building itself and common areas of it may be owned by a landowner, and after 99 years you would have to give the property back. Leasehold is often more complicated to advise on than freehold property.

LEGAL FEES

This is the charge for our labour and expertise in dealing with your conveyancing. Best Value Conveyancing works on a fixed fee basis so you know in advance what you’ll have to pay, and we’re confident our fees represent best value for conveyancing fees. All quotes include VAT.

MORTGAGE

In simple terms this is where you grant a right in the property to a financial institution which has lent you money. They provide you with funds to purchase the house, and it is yours, but in the event that you fail to keep up the required payments the mortgage company may take possession of the house and attempt to sell it to get back their investment, leaving any shortfall for you to make up. It’s important that you ensure you will be able to pay the mortgage as required. The mortgage is actually the written deed setting out the grant of that right to the bank, rather than the money itself. If you buy a property with a mortgage we will usually be appointed to act for the mortgage company as well as you, as your solicitor will have to prepare the mortgage paperwork and advise them on the transaction at the same time. They don’t pay your solicitor for this additional service.

MORTGAGE OFFER

The written offer of mortgage from your lender. A copy is usually sent to you and to your conveyancer. This sets out the precise details of your borrowing and any special conditions or relevant points your conveyancer needs to be aware of.

REGISTERS OF TITLE AND OFFICE COPIES

This is a copy of the information held by HM Land Registry. If you are selling, this will be obtained by your solicitor at the outset of your transaction so that they can draft the Contract documentation. These documents are a brief summary of the “title deeds” relating to a property and tell people, amongst other things, who owns a property and who has a mortgage over that property. It is a requirement that these documents are no more than six months old at completion.

REMORTGAGE

A transaction in which a previous mortgage is replaced with a newer one, usually to benefit from different terms or to release equity from the property. Get a quote for your remortgage here.

RESTRICTIVE COVENANTS

Legal promises and restrictions affecting a property and contained in the registers of title or office copies. These are legally binding, even though they can sometimes seem trivial. They include such things as not to keep pigs our poultry and not to keep a caravan in the front garden. They may also restrict future additions or alterations to a property and may prohibit building or residential premises on a particular parcel of land.

SEARCHES

These are official queries with various bodies, which provide your conveyancer with information about matters which may affect your property. Searches are undertaken for water and drainage (to make sure you have a water supply and are connected to the mains drainage system), with a local authority (to make sure there are no pending planning applications, road schemes etc), and for environmental issues.

STAMP DUTY LAND TAX

Stamp Duty Land Tax, or SDLT, is a tax charged on purchases of property. The charge starts at 1% of the value of the property for properties over £125,000.00 in value, and increases in bands over £250,000, £500,000 etc. This is usually the largest single amount we have to quote for.

TRANSFER

This is the official form which is produced to act as a deed transferring the interest in the property from one person to another. Without it the property does not change hands. You will usually have to sign this at the same time as the contract documents. There are witnessing requirements which your solicitor will advise you on.

VACANT POSSESSION

This means handing over an empty property, including the loft and any outbuildings. No pets, no unwanted items and no squatters. You have to remove everything and everyone who is not agreed to be there.

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