Conveyancing Jargon Translated

This describes where a person who is selling a property is also buying another one. There is a series of transactions dependent upon each other eg. A sells to B who is selling to C.

This is the date when legal title passes from seller to buyer and people move. It is not fixed until exchange of contracts. Purchase monies are paid over to the seller in return for the keys being released to the buyer.

This is a financial breakdown of the costs involved in your property transaction.

This is the agreement for sale drawn up the sellers’ solicitors which includes all the agreed terms for the sale. It gives details of the buyer and seller, the property address and the sale price. It is in two identical parts one of which is signed by the buyer and one by the seller.

The difference between the current value of the property and the outstanding mortgage loan secured on it.

This is the sum of money paid by the buyer to the seller’s solicitors on exchange of contracts. The Contract will usually state the deposit to be 10 percent of the purchase price but a smaller deposit may be accepted.

This is the point at which the matter becomes legally binding and neither party can pull out without financial penalties.

This indicates ownership of both the land and the property standing on it. Not normally available for flats.

Annual charge payable by the leaseholder to freeholder.

This is an insurance policy which is taken out to protect the insured against some defect in the title. There is usually a one off payment to provide cover for a term (generally 25 years).

Government Department which deals with registration of property and holds records of ownership for every piece of land/property which has been registered.

This indicates ownership of the property but not the land it stands on, for a defined period of time, subject to payment of ground rent and compliance with covenants and regulations contained in the lease. This type of title applies to nearly all flats and some houses.

There is generally a Management Company who deals with service charges and ground rent collection in blocks of flats. They will by appointed by the freeholder and will charge for their services.

This is a loan (sometimes called a “Legal Charge”) which is secured against the property. The effect of this is that the property cannot change ownership without the loan being repaid. The lender has the right to repossess and sell the property if the borrower fails to make loan repayments.

This is the official document issued by the lender which confirms that it is prepared to lend money for the purchase of the particular property. It sets out the amount being borrowed to fund the purchase together with the terms such as how long the loan will be for and what interest will be charged by the lender.

These are legal rules which are binding on the property and the owners. If they are broken then the owner could be held liable for their breach and suffer loss as a consequence. Eg. A restriction which forbids any extension without the consent of a particular person would be breached if the property owner erected a conservatory without getting the necessary consent.

Charge made by lender for paying off the mortgage before the expected end date.

The most common searches are detailed below:

• Local – requests information from the local authority about the property being bought such as planning entries or whether there are any financial charges – it does not reveal information about the surrounding area
• Mining – request to the Coal Board for details of any underground workings which might cause damage to the property – it will reveal whether there are mine shafts nearby or whether any subsidence claims have been made
• Environmental – checks to see if contaminated land or whether the property is at risk of environmental issues eg flooding
• Drainage – reveals whether the property is on mains water and drains
• Land Registry – checks to see nothing has been changed on the register since the official copies were obtained and freezes the register for a priority period to allow the buyer to submit their registration application
• Bankruptcy – search against buyer’s name when a mortgage is involved as it is an offence for a bankrupt to obtain credit

This is a government tax on transfers of land and property and is calculated as a percentage of the purchase price paid; there are price bands with different rates.  It is paid by the buyer on completion of their purchase. Properties sold for less than £125,000 do not currently attract this tax however in some cases after 5th April 2016 they may do (see below).

Stamp Duty is just payable on the part of the purchase price which is over the previous band limit. On a purchase price above £125,000 and under £250,000 then the tax is 2 percent and between £250,000 and £925,000 the rate is 5 percent. Properties over £925,000 attract a rate of 10 percent over this amount.

From 6th April 2016 there will be an additional 3 percent charged (on top of the existing rates) for all second homes and buy to let purchases. This means a property under £125,000 which currently does not trigger a stamp duty payment which be taxed at 3 percent of the price and for higher priced properties there will be an additional 3 percent on the part of the price above the previous band limit.

This is required for all property transactions regardless of whether any Stamp Duty Land Tax is due. There is a multi page tax return which must be submitted to the Inland Revenue within 14 days of completion of a purchase otherwise penalties are payable.

This is an inspection of the property made by a surveyor which will reveal information about the structure and condition of the property. There are different levels of survey such as Home Buyer and Full Structural which will differ in the extent of detail they reveal about a property.

This is the deed which actually changes the ownership of the property from seller to buyer when it is lodged at the Land Registry.

This is a superficial check made by the mortgage lender to see whether the property is worth the sum they are intending to lend on it.

This is another term for the seller of the property.