Conveyancing Terminology

Affordable Housing – These are homes provided at below-market prices through Government backed home-ownership programmes such as Shared Equity HomeBuy Schemes, as well as social renting from Registered Social Landlords. The Homes and Communities Agency is responsible for the delivery of these schemes, and the Tenant Services Authority is the watchdog for social tenants and the regulator of social landlords.

Agreement -see‘Contract’.

Assent – The formal document required to transfer ownership of a property to a person entitled following the death of the owner.

Advance – This is the amount of money being provided by your mortgage lender to assist with the purchase. You should note that often the advance received in our account is less than the amount you have actually agreed to borrow due to your lender deducting their fees and charges. We will provide you with a detailed breakdown of your case finances once we know exactly what sums of money we are expecting.

AST – An Assured Shorthold Tenancy – the default and most common form of tenancy agreement for residential properties in England. If you are currently renting a property under an AST you will need to contact your landlord about bringing the tenancy to an end when your purchase completes. Alternatively, if you are buying a property to rent out you will most probably be entering into one of these with a tenant soon after completion!

Basic fee (sometimes known as ‘Legal fee’) – The fee charged by a solicitor for their time and skills. This is most often calculated as a percentage of the property’s sale price, although it can also be calculated as a fixed-fee or on a per-hour basis.

Bankruptcy Search – Shortly before exchange of contracts your conveyancer will carry out a Bankruptcy Search at the Land Registry, against the names of all people purchasing the property. This is to ensure that there are no current bankruptcy proceedings against you in accordance with the obligation that we have to protect your new mortgage lender.

Bridging Loan – This is a short term (and normally quite expensive) loan available as a last resort if you need to fund your purchase before completion of a related sale. A bridging loan can tide you over in the short term and may be worth the additional expense if you are running the risk of losing your dream home, but should only be taken after serious consideration.

Breach of Contract – Once contracts have been exchanged, if either party pulls out and does not complete the conveyancing process, they are in breach of contract and the non-defaulting party can legally seek reparations.

Brine search – Carried out to establish if a property is affected by disused workings in close proximity.

Boundaries – Boundaries define the extent of the property in question and are usually marked with fencing, hedging or walls. They are usually shown explicitly on the deeds plan and are often marked with inward or outward ‘T’ markings indicating whether the property in question or the neighbouring property own the boundary fences.

Building insurance – Once contracts have been exchanged, you will in most cases become responsible for the new property’s building insurance from the date of exchange (not the date of completion). This must cover the cost of rebuilding the entire property if it is destroyed. Your mortgage lender may want to see proof of this insurance.

Building Regulations – This is a detailed set of standards concerning the design and construction of buildings, covering the health and safety of the people using the building, energy conservation and access. Evidence of compliance with the regulations will be required for any building work carried out at the property, from extensions and loft conversions to replacement windows or a new boiler.

Caveat Emptor – This literally translates to ‘let the buyer beware’ and means the buyer is responsible for finding out the condition of a property using a surveyor.

Chain – A term used to describe a series of linked sales and purchases. A chain will usually start with a first-time buyer, or an investor looking to buy a property for rental. It will end with a property that has no onward chain: this might be a new-build home, a home sold by someone moving into a retirement home or a home being sold by the estate of someone who has died. Everybody in the chain has to agree on completion dates. If someone in the chain goes on holiday, and a completion date hasn’t been agreed, all parties would have to wait for their return before an agreement can be made.

Chattels – Items of personal property left over at a house and included in the purchase price, such as furniture. These are described on the Fixtures, Fittings and Contents form.

Client care letter – Solicitors will send a client care letter for you to sign and return. This is a formal contract and should be read thoroughly. It will detail what services will be provided and a breakdown of the cost, in addition to the solicitor’s complaints procedure.

Coal mining search – If the property is situated in a coal mining area this search will be conducted by the property lawyer to find out if coal mining activities will affect the property in the future.

Commons Registration Search – A search carried out by local authorities to ensure a property is not registered as common land or connected to a village green, resulting in third party rights over the property.

Completion date – This is the date that ownership of the property passes from the seller to the buyer. The seller and buyer should discuss dates between themselves and then notify their respective solicitors who will try to fit in with the suggested date. If there are unforeseen delays, for example, if the buyer does not receive a search or mortgage offer in time, or the “cash buyer” turns out to have a related sale then the completion date may have to be revised. For this reason you should not make any firm commitments such as giving notice on a job, arranging removals or making holiday bookings without first contacting your solicitor so that they can advise you of the situation. Only when contracts are exchanged and a completion date is fixed can you be virtually guaranteed that the completion date will be met. It is not essential for you to be present on the completion date but if you are going to be away, then you should let your solicitor know so that they can arrange for one of your relatives (or your solicitors) to act for you through a Power of Attorney. The time it takes to complete depends on how quickly the money transfers between bank accounts, but we would usually expect everything to be over by lunch time. Your Conveyancer will call you as soon as they receive confirmation that money has reached the conveyancer’s account. You must then drop off the keys with the estate agent. It is a standard condition of the contract that you will give vacant possession on completion. Do bear in mind that completion could take place very early, possibly as early as 9am, so you’ll need to be organised. If you are not out of the property, at the very latest, by about 1pm or 2pm you will run the risk of breaching the terms of the contract. This could mean you incur additional fees and charges from your buyer.

Completion statement – A documented financial breakdown of the property purchase normally sent after exchange but before completion. This important statement details the conveyancer’s full fees including disbursements and VAT.

Conflict of Interest – This situation could arise if our duty to one client has the potential to adversely affect our relationship with or duty to another client. For example, a conflict could arise if we become aware of something of which we are required to inform your mortgage lender, but you instruct us not to disclose anything. In these circumstances we would have no choice but to stop acting on the transaction. The professional rules under which Licensed Conveyancers operate permits a firm to act for both a seller and a purchaser of the same property provided the parties are aware of it and do not object. Also a different conveyancer within the firm must represent each party. This allows us to keep more parts of a chain ‘in house’ which has been proven to reduce the time taken to reach exchange and completion!

Conservation area – If the property to be bought lies in a conservation area protected by a local authority, it may be subject to exterior planning restrictions to preserve the look of the area.

Contract (sometimes referred to as the ‘Agreement’) – This is the agreement between the buyer and the seller. It sets out the main terms of what has been agreed such as the property, the price and the names of the parties. It also deals with the process if something goes wrong. Rather than making the buyer and the seller meet to sign the same contract, the seller’s solicitor draws up two copies of the same contract, and each party signs their own copy. When both parties are ready to legally commit, the two contracts are exchanged.

Conveyance – Traditionally, a common name for the legal document that officially confirmed the sale or purchase of a property or piece of land. Nowadays the transfer is conducted using a Transfer deed/document although in some cases a conveyance may be used.

Conveyancing – The legal and administrative process of transferring property title from one party to another. This is most often undertaken by solicitors or licensed specialists and is a necessity for most property sales taking place within the United Kingdom.

Conveyancer – Conveyancers are those who have undertaken the conveyancing process. Traditionally they are solicitors, but in recent years specialists have appeared who solely offer conveyancing as a dedicated service. These may be solicitors who have decided to specialise, or licensed and regulated firms that are not qualified as solicitors.

Council for Licensed Conveyancers (CLC) – This is the governing body that licenses and regulates conveyancers. You should always ensure your conveyancer is a full member. Click here for more information.

Covenants – Obligations and restrictions, known as ‘positive’ and ‘negative’ covenants respectively, that can be attached to a property. They can be positive in nature, such as a covenant to maintain a fence, or negative such as a covenant not to keep pigs or not to build an extension.

Deeds – As long as the title to the property is registered, a single document replaces the traditional bundle of paperwork which constituted Title Deeds and is all that is now needed as evidence of your ownership of the property. All information previously detailed in the Deeds is now stored electronically at the Land Registry, alleviating the problems which could occur when Title Deeds were lost or misplaced. Any historical documentation provided by a seller will be handed over to the buyer for their information.

Deposit – On exchange of contracts the seller can insist on receiving from the buyer a 10% deposit of the purchase price. However as many people are not contributing as much as 10% to the purchase, reduced deposits are often agreed. You should be aware, however, that if you are a buyer and you pay a reduced deposit then fail to complete the purchase through no fault of the seller, you will, under the terms of the contract, be required to make the deposit up to the full 10%. You may also have to pay compensation to the seller if the seller loses out through your failure to complete.

Disbursements – A disbursement is a fee which we have to pay someone else on your behalf. An example is the fee paid to the Land Registry. Your conveyancer will need money up-front for these, which is why you should expect to be asked for an initial payment when you instruct your chosen firm.

Drainage search – A check carried out during the conveyancing process that ensures a property is connected to both fresh and foul water sewers.

Easements – Easements are rights that one person has over land belonging to another, such as rights of way over a garden, the right to park your car or the right to light. Easements are usually expressly created by or within a Deed, but can also arise through implication if they are deemed necessary (such as a right of way to enable access to your front door).

Environmental search – This is carried out to check if there are any known environmental issues affecting the property, these include matters such as landfill or waste disposal sites in the area, if the property has been built on an old industrial site and whether there are any risks from contaminated land, toxic emissions, flooding, subsidence etc.

Easements – Easements are rights that one person has over land belonging to another, such as rights of way over a garden, the right to park your car or the right to light. Easements are usually expressly created by or within a Deed, but can also arise through implication if they are deemed necessary (such as a right of way to enable access to your front door).

Enquiries – This is a legal term but it means exactly what you think it does. Buying and selling a home is a fairly tricky process, with hundreds of potential questions that can delay or upset the transaction. The buyer’s conveyancer needs to make sure that they buyer knows exactly what they are buying. There are limitless reasons why the buyer’s conveyancer might need to raise enquiries. There might be issues contained within the title. Perhaps an extension was built and the planning permission hasn’t been produced. Or the property might be subject to flooding or other environmental issues. You must let your chosen conveyancer know of any enquiries you specifically want raised as early as possible. Usually we will be able to answer these questions from the information you have provided in your starter pack. But we may need to telephone you to clear a few points, or request copies of paperwork you might have filed away.

Environmental Report – This search deals with contaminated land issues as well as proximity to recognised flood plains, industry, land fill etc.

Equity – The difference between the value of a property and the figure owed to the mortgagee.

Exchange of contracts – This is a very important moment. From the minute contracts are exchanged, the matter becomes binding. From that moment on, the seller must sell, the buyer must buy, it must be done at the price stated in the contract. Until contracts are exchanged NOTHING is binding therefore either party can walk away from the transaction with no penalty.

Fixture, Fittings and Contents form – This is a list of the items at the property which are either included or excluded from the agreed price. This form is completed at an early stage by the seller and sent to the buyer, so that both parties understand what is included in the selling price.

Freehold – With freehold property, the owner has complete and absolute ownership of the land and all buildings built on it. The freehold owner has the right to do as they like with their home and land, subject to legal and planning constraints.

Flying Freehold – This exists where part of one property extends over or under a neighbouring property, for example where the bedroom of one house ‘overhangs’ the dining room of the house next door. Special care needs to be taken in these circumstances to ensure that all necessary rights and obligations are present in the title.

Full Title Guarantee – This is given where the seller of a property owns the entire legal and equitable interest in the property, and has the right to dispose of it in the manner purported – it means that they know everything about the property.

Ground rent – This is rent paid by a tenant to a landlord in the event a property is leasehold, usually in yearly amounts. It is effectively rent that you pay for the use of the land on which the properties lies

HM Land Registry – A Central body that retains records of who owns the land, and under what conditions. This was set up in 1925, to simplify the conveyancing process. Not all land in England and Wales is registered today. This is partly due to the fact that land can only be registered following certain “triggering events”. The Land Registry has its own website which provides useful information. If you wish to look at the Land Registry’s website, please click here.

Homebuyers Report – This is a form of survey which lies between a basic Mortgage Valuation and a Comprehensive Structural / Building Survey both in cost and level of detail. It comes in a standard format and is only intended for conventional properties which are in reasonable condition. This survey will focus on the essentials that you, as a property purchaser, should be aware of and will highlight any significant problems or defects.

HIP – Home Information Packs provided information for the buyer and the buyer’s conveyancer as soon as a property was marketed. Until 21st May 2010, a HIP was required for every residential property being marketed – they have now been abolished. Following new government legislation, it is now no longer necessary to have a HIP in order to sell your property. An Energy Performance Certificate (EPC) is still a legal requirement.

Indemnity contribution – Some firms seek to charge for this as a separate disbursement but it should be covered by the firm’s own costs and it is not a proper disbursement. All solicitors in England & Wales need to have indemnity insurance in place as a requirement of practising.

Indemnity Insurance – This insurance may be suggested by your conveyancer to protect, either you, your mortgage lender or both, against a potential liability or defect in the title to a property. Common issues which may be insured against include a lack of planning permission or building regulations consent for an extension, breach of covenant, or missing title documents.

Initial Payment – This is a small deposit to cover the expenses the buyer’s conveyancer will incur during the early stages of the transaction, to cover the cost of, for example, your searches.

Index map search – A search undertaken at the Land Registry to determine whether a premises is registered or unregistered.

Joint Tenants – This is one of two options for the way in which a property may be owned. On the death of one of the owners, the property will automatically be transferred to the surviving owner(s). This will happen irrespective of whether or not the deceased has made a will. Neither of the owners can leave their share of the property to someone else. The sole survivor can deal with the property any way they want. For the alternative option, please see Tenants in Common.

Land certificate – The official certificate issued by the Land Registry when a property is registered detailing ownership and interest in the property without any legal charge/mortgage/secured loan.

Land Registry – Her Majesty’s Land Registry, to use its full name, is the government department formed to maintain and develop the register of title to freehold and leasehold land and properties in England and Wales. The Land Registry also guarantees title to registered land on behalf of the Crown, meaning that if someone suffers a financial loss due to an error in the register it may be possible to obtain compensation.

Land Registry office copies – The legally permissible document outlining who owns your property, held by HM Land Registry. It is requested by your conveyancing provider during the conveyancing process.

Law Society – The Law Society is the representative body for solicitors in England and Wales. Please click here for a link to their website.

Lease – A lease is a contract and a set of rules and regulations between a Landlord and a Tenant granting a right to possess property for a set period of time at a set rent.

Leasehold – in contrast to a freehold property, a leasehold property is one where a party buys the right to occupy land or a building for a given length of time, which may extend into hundreds of years. When a lease expires however, ownership of the property reverts back to the freeholder, although lease extensions can often be negotiated.

Leasehold Property Information form – This is an alternative version of the Property Information Form (SPIF) which is used when dealing with leasehold properties.

Legal Fee – See ‘Basic Fee’.

Limited Title Guarantee – This is similar to Full Title Guarantee in that it confirms the seller’s legal right to dispose of the property. However, it also means that the seller cannot completely confirm that it is free from any adverse aspects. This is normally because the seller has no personal knowledge of the property because, for example, they are selling under a Power of Attorney or Grant of Probate.

Local authority searches – This is a list of questions about the property, which are sent to the local authority, for example, whether the road serving the property is maintained by the council and whether there have been any planning applications on the property. The search is against the property only and does not cover the surrounding area. A word of warning – the search will not show any planning permissions or matters affecting land or buildings outside the boundaries of the property. It is important that you let us know at the start of the transaction if you require information on any particular point or if you wish us to ask any particular questions of the local authority. Each local authority charges a different fee which can vary considerably.

Major Works – This is a term used by Landlords for work carried out to a flat or maisonette block of a cyclical or extraordinary nature, the cost of which isn’t covered by the monthly service charges. The Landlord has to let you know about this in advance, and there are detailed consultation processes which have to be complied with before any invoices can be raised. The sort of work which would fall within this definition includes new doors and windows, a new roof, installation of door entry systems for the block and repainting or all common areas.

Mortgage Deed – This is a legally binding document that you need to sign to show you agree to the mortgage lender’s terms and conditions. It also shows that you consent to their loan being secured on the title to the property (which means that they can repossess the property should your mortgage payments fall into arrears). After completion we send the deed to the Land Registry so they can complete the registration correctly. We cannot draw your mortgage advance or complete until we have this document on file. It is vital that you sign and return the mortgage deed as soon as possible. On a sale the solicitor will contact your mortgage lender at an early stage to ask how much it will cost to pay off the mortgage – you should be sent a copy of this figure. You may find that you will be charged a financial penalty if you pay the mortgage off early. This is a consideration to be taken into account when agreeing a completion date, and often applies when your existing mortgage was set up on a fixed rate, or you obtained a ‘cashback’ figure.

Mortgage fees – These fees are sometimes charged by solicitors for acting on behalf of your bank or building society.

Mortgage Offer – This is the formal offer of advance from your Mortgage Lender, and will set out the mortgage product, terms and conditions attached to the loan as well as the amount of money being provided and all interest and fees. The Offer will be in a standard form as prescribed by the Financial Services Authority.

Negative equity – An issue where the amount of money you owe on the property, usually via a mortgage, is more than the sale value of the property.

Occupier – This is an adult who resides at a property other than the registered owner/s. If the property is being sold, the Occupier will be required to sign the contract or a waiver confirming that they will be vacating the property on or before completion and waiving any rights of occupation which may have arisen. On a property purchase, the Mortgage Lender will provide a similar form in which any Occupier will waive their rights of occupation in the event that the lender has to take possession.

Our Account – We receive and hold funds on your behalf, acting under your instruction. Completion, therefore, takes place as soon as the money arrives in our bank account, rather than your personal account. On sale cases, you are not legally allowed to withhold the keys from the buyer once the money has been received.

Planning Permission – This is the formal consent of the Local Authority planning department to build, extend or alter a building. Planning Permission is normally granted conditionally, and will be dependent on the additional approval of, for example, the colour and type of bricks and roof tiles and the location of windows.

Power of Attorney – If someone is unable to deal with their own affairs (such as the sale or purchase of a property) they can appoint someone else to act on their behalf. This may be because they are unwell or just that they are going to be out of the country or out of contact for a while. A Power of Attorney is a document drawn up by a lawyer conferring either general or specific powers on the chosen individual.

Power of attorney – This document allows a person to act as a legal representative of somebody else with their consent. These are often used to protect the financial interests of the ill or the elderly.

Pre-completion searches – These are searches undertaken by your conveyancing provider before contracts are exchanged. They check to see whether you have been or have become bankrupt and that the property in question is legally owned by the seller. Also known as priority searches.

Priority searches – See pre-completion searches.

Property Information Form – This is a questionnaire about the property completed by the sellers. It covers such items as guarantees, neighbour disputes and boundaries. If you are buying then time can be saved if you tell your solicitor at an early stage if there are any particular points about the property that concern you. They can then ask the seller’s solicitors the relevant questions. If you are selling and the buyer’s solicitor asks a question to which you do not wish to give an answer, for whatever reason, it is essential that you discuss it with your solicitor. Failure to disclose information could give the buyer grounds for taking action against you.

Redemption Statement – This is a statement from your mortgage lender telling us exactly how much money is needed to repay your mortgage. This may include any early repayment charge or penalty and any additional fees payable to the mortgage lender. If you have any other loans secured against the property, we will need statements for these also, as we are obliged to redeem all of them. Early on in the process we will request an initial statement (or statements). We will forward them to you so that you can check they are only charging the fees agreed when you arranged the mortgage and they are accurate. Once contracts have been exchanged, and there is a completion date, we will then request final redemption statements. These will give us exact figures calculated to the correct date. It’s important that you continue to pay your mortgage throughout the sales process. If you don’t you will incur additional charges and interest.

Redemption fee – a penalty sometimes incurred if paying off a mortgage early.

Reparations – the compensation or remuneration required in the event of a breach of contract.

Reservation fee – an administration fee charged to cover the cost of reserving a mortgagor’s entitlement to a loan on certain terms, or a fee paid to a builder or property developer to reserve a new property.

Retention – This is a sum of money held back by a party in the transaction. A purchasers conveyancer will often request that a sellers conveyancer hold back a sum of money after completion of a leasehold transaction in case a deficit is revealed when the end of year service charge accounts are issued. Alternatively, a Mortgage Lender may decide to make a retention on the loan (hold back part of it) until crucial works are carried out at the property such as an overhaul of the electrics or roof.