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Conveyancing Glossary

We like clear English but conveyancing has jargon that sometimes cannot be avoided. This conveyancing glossary has been developed to help clients understand some of the jargon that is necessary for a house sale or purchase.

Assured Shorthold Tenancy

This is the most common form of tenancy agreement used for residential properties in England. Commonly, they will run for a period of 6 or 12 months.

Breach of Contract

Should either party try and pull out having exchanged contracts, they are considered to be in breach of contract which would allow the non-defaulting party to seek compensation.

Build Warranty

When buying a new build property from a developer, it is common for the developer to offer a 10-year warranty. The nature of the warranty will vary depending upon the provider but the most common build warranty company is the NHBC (National House Building Council).

Building Insurance

Once contracts are exchanged, the buyer will become responsible for buildings insurance on the property. This should cover the cost of the rebuilding of the property should it be destroyed. The seller should maintain buildings insurance up to and including the date of legal completion. When buying it is possible that a mortgage lender may wish to see evidence of buildings insurance having been taken out.

Caveat Emptor

Let the buyer beware. This is most relevant when it comes to the physical condition of the property and it is extremely important that a buyer commissions a survey or valuation report to ensure that the buyer is entirely satisfied with all physical aspects of the property.

Chain

Whenever there are two or more parties selling and buying, there is said to be a chain of transactions all of which will need to be tied in together from the exchange and completion point of view. This can make the conveyancing process slower as all parties in the chain need to be ready to exchange before the exchange itself can happen.

Chattels

These will be items to be left by the seller in a property and which will be included in the purchase price. This may include such things as furniture and white goods. Chattels are detailed on a Fixtures Fittings & Contents Form.

Coal Mining Search

Such searches are relevant if a property is located in a coal-mining area. Your conveyancer will identify whether or not a coal-mining search is advisable. Coal-mining activities, be they either current or historic, may affect the property in the future.

Commons Registration Search

This involves enquiries being made of the Local Authority to establish whether or not the property is registered as common land or is linked in any way to a village green which may result in a third party establishing a right of some kind over the property.

Completion Date

This is essentially the moving date on which the seller will be required to vacate the property and the buyer will be entitled to collect the keys from the selling agents and move in. It is the day when full payment is made for the property by the buyer to the seller via their respective solicitors.

Conflict of Interest

In the event that our duty to one client adversely affects our relationship with or our duty to another client, a conflict of interest may arise. For example, if we are required to disclose a matter to a mortgage lender but we are instructed not to do so by our client, a conflict of interest would arise and we would no longer be able to act.

Conservation Area

Such areas may be created by Local Authorities to protect certain aspects of the locality which may lead to restrictions being imposed on exterior planning.

Conveyance

This is an historic name for a transfer deed which would show the sale or purchase of a property or piece of land in the past. Whilst often historic in nature, conveyances may well include rules and regulations and rights granted to the home owner and reserved to the adjoining land owners which may still be relevant today.

Covenants

Covenants can be either positive or negative in nature and are commonly incorporated within the title deeds for a property. These may include obligations upon the home owner requiring positive actions to be carried out during the owner’s period of ownership and occupation or may include a list of restrictions which prevents the owner from carrying out certain tasks.

Disbursements

These are costs charged for such matters as searches. These form part of the fixed cost quote provided at the beginning of a transaction.

Disbursements

These are costs charged for such matters as searches. These form part of the fixed cost quote provided at the beginning of a transaction.

Easement

This is a right of way over another person’s piece of land or a right of way over the property you are purchasing or a right over the property you are purchasing granted to another.

Equity

This is the difference between the sale/purchase price of the property and the amount owed to any lender.

Exchange of Contracts

At this point in the conveyancing process, the buyer becomes legally obliged to purchase the property and the seller becomes legally obliged to sell the property. Beyond this point, neither buyer nor seller can withdraw from the transaction without some potential compensation being due to the other party.

Full Title Guarantee

Where an owner of a property owns the entire legal and equitable interest in the property and has the right to sell it to the buyer, the seller is deemed to be able to sell with full title guarantee. Where the seller is for example selling via a Power of Attorney or Grant of Probate, the seller will sell with limited title guarantee as the seller’s knowledge is deemed to be limited due to the fact that the seller is not the registered proprietor of the property.

Gazumping

This involves a seller, having accepted an offer from a buyer, deciding to accept a higher offer from another potential buyer.

Ground Rent

This is an amount payable to a landlord by a lessee on a leasehold property. The ground rent figure can vary considerably from property to property.

Incumbrance (also Encumbrance)

Incumbrances can be issues with the property that results in a reduction in its value and may result in it being less marketable.

Indemnity Insurance

Such an insurance policy may be recommended to you by your conveyancers to protect your interests and those of any lender against potential liabilities or defects in the legal title of the property. Indemnity insurance is available for all manner of circumstances but is most commonly taken out where there is a lack of Local Authority consent for such items as extensions or lack of double-glazing installation certificates (FENSA).

Index Map Search

This involves a search being carried out at the Land Registry to determine whether a property or piece of land is registered or unregistered.

Leasehold

Whereas a freehold property involves a permanent change in the ownership of land, a leasehold transaction involves a party purchasing a right to occupy land for a given length of time. That length of time can be extended subject to agreement between landlord and lessee or possibly via a Tribunal if an informal agreement cannot be reached between the landlord and lessee.

Legal Ombudsman

The Ombudsman is able to deal with complaints where a client is not happy with the legal service being provided and once all internal complaints procedures have been exhausted.

Negative Equity

In the event that the property is subject to a legal charge or charges that exceed the value of the property, the homeowner is deemed to be in negative equity which may make the selling of the property extremely difficult.

Occupier’s Consent

Where a property is occupied by a person or persons other than the registered owner, that person or persons will be required to countersign the contract to ensure that vacant possession is provided on completion.

Office Copy Entries

The vast majority of properties in England and Wales are registered with the Land Registry with each property having an allocated reference number. The Office Copy Entries confirm ownership of the property and will provide details of mortgages and any covenants and rights affecting the legal title.

Power of Attorney

This allows an individual or individuals to act as legal representatives of someone else with their consent most commonly used to protect the financial interests of the elderly.

Pre-completion Searches

These involve searches being carried out by the conveyancer around the time of exchange of contracts. They will include bankruptcy searches against buyers and will also ensure that priority is given at the Land Registry to the incoming owner so as to ensure that no other creditors can claim any interest in the land at the last minute.

Pre-completion Searches

These involve searches being carried out by the conveyancer around the time of exchange of contracts. They will include bankruptcy searches against buyers and will also ensure that priority is given at the Land Registry to the incoming owner so as to ensure that no other creditors can claim any interest in the land at the last minute.

Service Charge

This involves a payment being made to the landlord or management company to cover repairs, maintenance or improvements that may be required to a property. Most commonly service charges are associated with leasehold properties but a number of freehold properties, and in particular newer developments, carry a service charge liability.

Stamp Duty

This is the tax payable to the Inland Revenue on the purchase of a property. Stamp Duty Land Tax will not always be payable as there are a number of criteria involved. You should refer to the quotation provided to you which will detail the exact Stamp Duty Land Tax liability for the property you are buying.

Subject to Contract

This is a term used during the conveyancing process prior to exchange of contracts, to make it clear that nothing is legally binding until contracts are exchanged.

Transfer of Equity

This involves the transfer of a legal title from one person’s name to another person’s name. Most commonly a property would be in the joint ownership of two individuals and is then to be transferred, via a transfer of equity, to the sole name of one of those two individuals.