Please click a letter to view common terms used in Conveyancing.
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!
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.
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.
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.
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.
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.
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 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.
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.
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.
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.
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 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.
Special Mortgage Conditions – The special conditions are detailed within your mortgage offer and must be read through carefully. Some of these conditions will affect us – they might require us to obtain some additional paperwork or make certain enquiries regarding the title to the property. There will be other conditions that will affect you – failure to comply with these conditions would be a breach of the mortgage terms, and would be treated in much the same way as failing to keep up your monthly payments. Special conditions could include a requirement to re-wire the property or fix the roof within a specified time; or having to pay off an existing loan or credit card.
Solicitor – The legal conveyancing process is traditionally undertaken by a solicitor who acts on your behalf once instruction has been received. In this instance conveyancing is one of the services the solicitor offers. See conveyancer.
Solicitor’s Regulation Authority (SRA) – The independent regulating body of the Law Society of England and Wales, the SRA can be called upon to deal with disputes if you have received an unsatisfactory service from your solicitor. Please click here for a link to their website.
Stamp duty – A tax based on the purchase price of the property in question. The money accrues to HM Revenue & Customs. HMRC have their own website with useful information Please click here for a link to their website.
Subsidence – Where a property moves due to inadequate foundations or significant change in underlying ground resulting in the instability of a building structure.
Survey – This is a report carried out by a surveyor on the physical state of the property you are buying. If you are buying a property you should be aware that the property is “sold as seen”. It is for you, as the buyer, to discover any physical defects by means of inspections and surveys. Most houses are bought with the assistance of a mortgage and the bank or building society, will require a mortgage valuation. However, this is not a survey – it merely ensures that the property is of sufficient value to protect the lender’s interest. You should at least have an RICS Homebuyer’s Report prepared by a qualified surveyor. This will cost more than a mortgage valuation but it is advisable. It is possible to go one step further and have a full structural survey (you should speak with your chosen surveyor who carries out the Homebuyer’s Report as to whether they think any matter should be investigated further).
Third party rights – When someone other than the legal owner of a property has the right to use or control the land of which they have no ownership.
Title – This is the right of ownership of a property, and the documentary evidence of that ownership. Traditionally your mortgage lender would keep hold of the title documents until the mortgage had been repaid. But these days everything is stored electronically by the Land Registry.
Title Information Document -This is an official copy of the title to the property, as held by the Land Registry. It is simply a few pages of A4 paper that shows the address of the property, name of the property owner (and details any mortgage lender having an interest in the property). The title information document replaces traditional ‘title deeds’. This document will probably be the last thing you receive from us after completion. Occasionally a seller will still hold some redundant original ‘deeds’ for the property. If we receive any of these we will forward them to you, but they are merely for your personal information and have no actual value or worth.
Transfer deed – This is the document that passes the ownership of the property from the seller to the buyer. It is dated with the completion date, and will be sent to the Land Registry after completion. The Land Registry require this deed to change their records, and show the buyer as the new owner of the property.
Transfer of equity – The document transferring the ownership of a share or interest in a particular property from one person to another.
Wayleave Agreement – A formal agreement with a property owner enabling a service provider (electricity or telephone company) to install piping or cabling through or over the property.