Conveyancing Transactions - Legal Jargon Explained
http://www.housebook.ca/articles/8386/1/Conveyancing-Transactions---Legal-Jargon-Explained/Page1.html
John Tighe
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Published on March 5, 2010
Chartered surveyor
A Royal Institute of Chartered Surveyors (RICS) surveyor who is qualified to carry out a survey on a property
Completion date
The date on which the transaction is completed and the property changes hands
Chartered surveyor
A Royal Institute of Chartered Surveyors (RICS) surveyor who is qualified to carry out a survey on a property.
Completion date
The date on which the transaction is completed and the property changes hands. Usually this happens after exchange. More rarely exchange and completion are simultaneous .
Contract
This sets out the terms of the sale between buyer and seller. It is drawn up by the seller's solicitor and will then be negotiated.
Deposit
Not the same as the deposit that you put down when you take out a mortgage (e.g., you put down 20% and the lender lends 80%). In conveyancing, the deposit is the amount (usually 5 - 10%) paid by the buyer to the seller upon exchange.
Disbursements
This simply means "expenses" and is the term used by solicitors. Disbursements include things like search fees and land registry fees. Ask for disbursements to be included in your quote (most are known in advance) otherwise your bill could be a lot higher than you expect.
Environmental search
This looks at whether the property may be affected by things like flooding, landfill, waste disposal, contaminated land, etc.
Exchange
The exchange of contracts between buyer and seller. Once exchange has taken place the contract is legally binding and if the buyer fails to complete then they may forfeit their deposit (unless they were misled into signing the contract).
Fixtures, fittings and contents form
A form prepared by the seller setting out what fixtures and fittings (e.g., curtains, electrical appliances) are included in the sale, which ones may be included and at what price and which ones are negotiable. It may be included in the HIP, but does not have to be and can be given after an offer has been made.
Freehold
When the owner of the property also owns the land on which it is built.
HIP
Home Information Pack containing information and search results for the property. HIPs are now compulsory and you are required to have a HIP before you market your property (some documents can be added up to 28 days after marketing starts).
Indemnity contribution
Solicitors are required to take out insurance to protect their clients in the event of mistakes or fraud when dealing with their case. Usually this fee is charged to the client.
Land Registry
The Land Registry keeps records of land ownership. When a property is sold it is the buyer's solicitor's job to make sure that the transfer is recorded at the Land Registry.
Leasehold
A leaseholder owns the property, but not the land on which it stands, which is owned by the freeholder. Once the lease expires ownership of the property reverts back to the leaseholder.
Local authority search
A search that asks the local authority about things that may affect the property, such as: whether the road the property stands on is maintained by the council; planning applications that may affect the property; possible planning restrictions; and rights of way.
It's important to check what area the local authority search covers. If it only covers a limited area you may want to ask for additional enquiries.
Mortgage
The loan from your bank used to buy a property. Because the mortgage is linked to the property being bought the property cannot be sold until the mortgage is paid off.
Mortgage deed
This is a legal charge giving the mortgage lender rights over the property until the mortgage has been repaid.
Mortgage fees
Fees charged by conveyancing solicitors for acting on behalf of their client's bank or building society.
Mortgage valuation
The valuation survey carried out on behalf of your bank or building society before it will lend on a property to ensure the property is worth at least the amount they plan to lend. It should not be confused with a property survey (of which there are different kinds) carried out by a Chartered Surveyor - see Surveys.
Property information form
A questionnaire to be completed by the seller covering basic information about the property. The seller is legally obliged to answer the questions honestly.
Redemption fee
Some banks will charge a redemption fee for paying off a mortgage early or within a certain number of years of taking it out.
Redemption payment
The payment made in order to pay off the outstanding balance of a mortgage.
SDLT
Stamp Duty Land Tax - see Stamp Duty
Stamp duty
Also known as Stamp Duty Land Tax (SDLT). This is a tax on the purchase of a property and is usually paid by the buyer. The amount is based on the value of the property.
Surveys
Not the same as the valuation survey carried out by a lender. A property survey is carried out by a Chartered Surveyor and looks at things like the structure of the building and its value. There are different levels of surveys and their costs vary greatly.
Title deeds
Documents that prove ownership of a property and set out any rights or obligations affecting the property. If the property is still mortgaged they will be held by the lender.
Transfer deed
Also known as a TR1, this transfers ownership of the property from the seller to the buyer. It is completed by the buyer's solicitor following completion and sent to the Land Registry.
Water and drainage search
A search of the properties water and drainage supplies. It will check whether these are connected to the main water supply and sewerage system and how the property is billed for these services.
A Royal Institute of Chartered Surveyors (RICS) surveyor who is qualified to carry out a survey on a property.
Completion date
The date on which the transaction is completed and the property changes hands. Usually this happens after exchange. More rarely exchange and completion are simultaneous .
Contract
This sets out the terms of the sale between buyer and seller. It is drawn up by the seller's solicitor and will then be negotiated.
Deposit
Not the same as the deposit that you put down when you take out a mortgage (e.g., you put down 20% and the lender lends 80%). In conveyancing, the deposit is the amount (usually 5 - 10%) paid by the buyer to the seller upon exchange.
Disbursements
This simply means "expenses" and is the term used by solicitors. Disbursements include things like search fees and land registry fees. Ask for disbursements to be included in your quote (most are known in advance) otherwise your bill could be a lot higher than you expect.
Environmental search
This looks at whether the property may be affected by things like flooding, landfill, waste disposal, contaminated land, etc.
Exchange
The exchange of contracts between buyer and seller. Once exchange has taken place the contract is legally binding and if the buyer fails to complete then they may forfeit their deposit (unless they were misled into signing the contract).
Fixtures, fittings and contents form
A form prepared by the seller setting out what fixtures and fittings (e.g., curtains, electrical appliances) are included in the sale, which ones may be included and at what price and which ones are negotiable. It may be included in the HIP, but does not have to be and can be given after an offer has been made.
Freehold
When the owner of the property also owns the land on which it is built.
HIP
Home Information Pack containing information and search results for the property. HIPs are now compulsory and you are required to have a HIP before you market your property (some documents can be added up to 28 days after marketing starts).
Indemnity contribution
Solicitors are required to take out insurance to protect their clients in the event of mistakes or fraud when dealing with their case. Usually this fee is charged to the client.
Land Registry
The Land Registry keeps records of land ownership. When a property is sold it is the buyer's solicitor's job to make sure that the transfer is recorded at the Land Registry.
Leasehold
A leaseholder owns the property, but not the land on which it stands, which is owned by the freeholder. Once the lease expires ownership of the property reverts back to the leaseholder.
Local authority search
A search that asks the local authority about things that may affect the property, such as: whether the road the property stands on is maintained by the council; planning applications that may affect the property; possible planning restrictions; and rights of way.
It's important to check what area the local authority search covers. If it only covers a limited area you may want to ask for additional enquiries.
Mortgage
The loan from your bank used to buy a property. Because the mortgage is linked to the property being bought the property cannot be sold until the mortgage is paid off.
Mortgage deed
This is a legal charge giving the mortgage lender rights over the property until the mortgage has been repaid.
Mortgage fees
Fees charged by conveyancing solicitors for acting on behalf of their client's bank or building society.
Mortgage valuation
The valuation survey carried out on behalf of your bank or building society before it will lend on a property to ensure the property is worth at least the amount they plan to lend. It should not be confused with a property survey (of which there are different kinds) carried out by a Chartered Surveyor - see Surveys.
Property information form
A questionnaire to be completed by the seller covering basic information about the property. The seller is legally obliged to answer the questions honestly.
Redemption fee
Some banks will charge a redemption fee for paying off a mortgage early or within a certain number of years of taking it out.
Redemption payment
The payment made in order to pay off the outstanding balance of a mortgage.
SDLT
Stamp Duty Land Tax - see Stamp Duty
Stamp duty
Also known as Stamp Duty Land Tax (SDLT). This is a tax on the purchase of a property and is usually paid by the buyer. The amount is based on the value of the property.
Surveys
Not the same as the valuation survey carried out by a lender. A property survey is carried out by a Chartered Surveyor and looks at things like the structure of the building and its value. There are different levels of surveys and their costs vary greatly.
Title deeds
Documents that prove ownership of a property and set out any rights or obligations affecting the property. If the property is still mortgaged they will be held by the lender.
Transfer deed
Also known as a TR1, this transfers ownership of the property from the seller to the buyer. It is completed by the buyer's solicitor following completion and sent to the Land Registry.
Water and drainage search
A search of the properties water and drainage supplies. It will check whether these are connected to the main water supply and sewerage system and how the property is billed for these services.