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Jargon Buster
BRIDGING LOAN
A loan taken out
to 'bridge' the gap whilst waiting for the sale
of a property or the receipt of a mortgage
BUILDING REGULATION
CONSENT
Approval by the
local authority of the design and materials used
in building work
CAPITAL GAINS TAX
A government tax
on the sale of assets, including property. Generally
speaking, a persons principal private residence
is exempt.
CAVEAT EMPTOR
The legal rule which
means the buyer is responsible for finding out
the condition of property and matters affecting
the legal title using surveyors and solicitors.
CHAIN
A series of transactions
that are dependent on one another. One person
can only exchange on their purchase when they
exchange on their sale and so on.
CHANCEL REPAIRS
A liability affecting
some proprieties to contribute to the upkeep of
the chancel of an ancient parish church. Special
searches can be carried out to ascertain such
liability *
CHAIN MATRIX
A web based notice
board showing progress of buyers and sellers through
key stages in the transactions. Intended to be
part of the overall scheme for e-conveyancing.
CHAPS PAYMENT
A method of bank
transfer of funds which ensures the money is transferred
the same day.
CML HANDBOOK
Extensive instructions
to Solicitors on the requirements of Lenders for
residential mortgages. Covers technical matters
such as searches, title, leases and if the deeds
of a property do not comply with the Handbook,
the property may be unmortgagable.
COAL MINING SEARCH
A special search
to ascertain whether any issues might affect a
property These will be carried out in designated
areas.
CONSERVATION AREA
Area protected by
Local Authorities. Properties may be subject to
planning restrictions particularly relating to
the exterior of the property
CONTAMINATED LAND
Land affected by
contamination arising from a past use or by the
storage of things on the land in the past
CONTRACT
This is the agreement to
buy or sell that sets out all the terms. It is
prepared in duplicate. One copy is signed by the
buyer and the other by the seller.
COMPENTENT PERSONS
SCHEME
Certification Scheme
for building works as as alternative to Building
Regulation Approval.
COMMONHOLD
New form of legal
title to property giving owners joint control
over common areas and facilities
COMPLETION
The day when the property
is transferred to the buyer.
CORGI CERTIFICATE
See Gas Safe Certificate
COVENANT
Legal obligations
in a deed requiring someone to do something e.g.
maintain a fence (positive) or not to do something
e.g. not to carry on a business (restrictive)
DEMATERIALISATION
The process recently introduced
by the Land Registry whereby evidence of title
is recorded electronically thus doing away with
paper title deeds
DEPOSIT
This is part of the purchase
price and is due for payment on exchange of contracts.
10% is payable although a reduced deposit is often
negotiated. If you are selling, we can often use
the deposit from your sale. A buyer may lose the
deposit if they fail to complete the purchase.
DISADVANTAGED AREA
RELIEF
A reduction in Stamp
Duty Land Tax for properties in certain designated
areas, In view of the increase in the lowest threshold
for duty.
E-CONVEYANCING
Proposals not yet in force
for all aspects of property transfer to be handled
electronically; a true paperless transaction.
Although full e-conveyancing is still some way
in the future, many aspects of a sale or purchase
can be handled electronically already including
most searches, money transfer and some aspects
of registration.*
EASEMENT
A right given to
a property owner over adjoining property. This
could be a right of way or drainage or a right
to a water supply
ELECTRONIC FUNDS
TRANSFER
Intended to be part
of e-conveyancing, the aim is to make payments
up and down the chain simultaneous.
ENERGY PERFORMANCE
CERTIFICATE
Conveyancing requirement
enabling the Government to comply with a European
Directive. Now required for all properties being
let or sold including commercial properties.*
ENVIRONMENTAL SEARCH
A special search used to
ascertain whether there are any environmental issues
affecting a property. These may include flooding,
radon gas or landfill
EQUITY
The value left in
a property after deducting the mortgage outstanding
on the property
EXCHANGE OF CONTRACTS
This is the point at which
the agreement to buy or sell becomes legally binding.
If you are buying, your deposit is paid to the
Sellers solicitors at this stage. The buyer becomes
responsible for insurance on the property.
FENSA CERTIFICATE
An alternative to
building regulation approval for installation
of windows or glazed doors
FITTINGS AND CONTENTS
FORM
A detailed list of items
to be included in or excluded from the sale/purchase.
FLYING FREEHOLD
Where a part of
one freehold property is built over part of another
so that it does not touch the ground
FREEHOLD
A type of title to property
that goes on for ever
GAS SAFE CERTIFICATE
(formerly Corgi)
An alternative to
building regulation approval for gas installations
GAZUMPING
The practice of
sellers to accept an alternative, higher, offer
for the property even though they have been dealing
with another sale. The practice is not illegal.
GAZUNDERING
The opposite of
gazumping where a Buyer reduces his offer at the
last moment in order to secure the property at
a lower price. Again this is not illegal.
HOME INFORMATION
PACK
Pack of information
introduced by the Government in 2007. Failed to
fulfil their promise and suspended in May 2010.
HOME CONDITION REPORT
An optional form
of survey which the Government had originally
intended would be a compulsory part of Home Information
Packs.
INCENTIVE DISCLOSURE
A process whereby
any incentives offered by a Seller have to be
disclosed to the Lender so that the true price
of the property is known.
INDEMNITY INSURANCE
Special type of
insurance to support e.g. possessory title, buying
freehold or defective title or breach of covenant
or lack of building regulation consent
INHERITANCE TAX
Tax payable on death
on the value of the deceased's estate which will
include property. The value of previous gifts
may have to be taken into account
JOINT TENANCY
Method of owning
property jointly where the share of a deceased
owner passes automatically to the co-owner*
LAND REGISTRY
The Government agency responsible
for registration of title in England and Wales
LEASEHOLD
A title that exists only
for a fixed period, perhaps 99 or even 999 years.
Restrictions and obligations will be contained
in the lease and, usually, an annual ground rent
is payable. Almost all flats are leasehold and
in some parts of the country many houses are as
well.
LENDERS REQUIREMENTS
Much of the process
of conveyancing is dictated by Lenders who impose
stringent conditions as to what is or is not acceptable.
This can lead to delays and additional cost especially
as Lenders are unwilling to "take a view"
on the issues which often arise in the course
of a transaction.
LISTED BUILDING
A building considered
to be of sufficient historic or architectural
interest to merit special protection. The property
will be subject to special planning restrictions
MANAGEMENT COMPANY
Company often owned
by tenants, responsible for maintenance and insurance
of common parts of buildings and grounds*
MONEY LAUNDERING
CHECKS
Checks that lawyers
and banks have to carry out to identify clients
before acting for them
MORTGAGE
A loan to help the buyer
purchase. It is also the name of the document
that gives the lender security over the property.
MORTGAGE OFFER
The formal document
setting out the amount of a loan, the terms of
it and the method of repayment. May contain specific
conditions that have to be complied with. A prerequisite
to exchanging Contracts.
NEIGHBOURHOOD SEARCH
Sometimes called
Plan Search or Know Your Neighbor, an optional
search giving details of the character and statistics
for the area including planning applications on
adjoining properties.
NEW HOMES CONSUMER
CODE
Rules introduced
in April 2010 designed to give greater protection
to buyers of new homes.
NHBC
A warranty scheme
for new properties providing cover against major
structural defects for 10 years. An alternative
was provided by Zurich but this is no longer available
but existing commitments will be honoured.
NLIS
A system allowing
most searches to be made electronically speeding
up the conveyancing process.
PERMITTED DEVELOPMENT
Minor items of building
work which meet certain criteria and, as a result,
do not require planning permission.
PLANNING PERMISSION
Approval by the
local authority to the building or change of use
or extension to an existing property*
POSSESSORY TITLE
Title acquired by
a trespasser after a number of years
PROPERTY FRAUD
May include theft
of legal title by deception, mortgage fraud where
Borrowers obtain higher loans by false statements,
tax evasion or money laundering.
PROPERTY INFORMATION
FORMS
A questionnaire about the
property. These are completed by the Sellers
RANSOM STRIP
A piece of land
separating a property from the public highway
or public services which can thereby prevent access
or development.
REDEMPTION
Repayment of an
existing mortgage
REGISTERED LAND
Property whose title is
registered at the Land Registry. Following a purchase,
the title of unregistered properties must be compulsorily
registered
RENTCHARGE
Sum payable to a
third party even though the property is freehold.
Common in some parts of the country as a means
of income for a former owner or, more recently,
to enable covenants to be enforced
SALE STATEMENT
A compulsory part
of the new suspended Home Information Packs giving
details of the seller and title of the property.
SEARCHES
A check through the records
of public authorities for information about the
property and include
- Local Authority Search to
check status of roads, planning permissions,
compulsory purchase orders, new road proposals,
tree preservation orders and similar matters.
- Water Authority Search to
check if property is connected to main drainage,
water and proximity of nearest adopted sewer.
- Land Registry Searches to
check if the title is registered; whether there
are any third party interests registered whether
any of the parties are bankrupt.
- Sometimes additional searches
may be necessary with the Commons Registration
Authority, Companies Registry, Coal Authority,
Environment Agency and so on.
SERVICE CHARGE
Payment under a
Lease of other deeds to the Landlord or Management
Company to cover the cost of maintenance, insurance
and other services
SHARED OWNERSHIP
Scheme allowing
the purchase of a property jointly with a housing
association which will put up a share of the money
and allow you to purchase an enhanced share in
due course. The Government has plans to extend
the scope of this scheme
STAMP DUTY LAND
TAX
A tax paid by the Buyer
to the Government on a property where the purchase
price exceeds £125,000. There is a concession
whereby first time buyers are exempt from payment
on property purchased for less than £250,000.
SURVEY
Inspection carried out
on behalf of a buyer. Goes far beyond a valuation
that is usually carried out for a lender just
to assess the property for loan purposes.
TENANCY IN COMMON
Method of owning
property jointly where the share of a deceased
owner passes under the terms of his or her will
and not automatically to the co-owner*
TITLE DEEDS
Documents that prove Ownership
of the property (see also DEMATERIALISATION).
TRANSFER
This is the deed which
"transfers" the ownership of the property
from the seller to the buyer.
UNDERTAKINGS
A commitment by
a Solicitor backed by Rules of Processional Conduct.
Undertakings are used expensively in the conveyancing
process in connection with exchange of Contracts,
completions and the discharge of mortgages. Without
them the process would be almost unworkable.
UNREGISTERED LAND
Property where the
title has not yet been registered at the Land
Registry. Unusually more complicated to deal with
than registered land. Following completion of
virtually ay transaction involving unregistered
land, the title has to be compulsorily registered.
VOLUNTARY REGISTRATION
The process where
an owner of unregistered land can seek registration
of the title independently of any particular transaction.
This process is encouraged by the Land Registry
giving a discount on the fees payable.
* A more detailed Factsheet
is available - Please ask for a copy
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