What do they all mean?
Stumped by Stamp Duty? Baffled by Buy to Let? Dumbfounded by disbursements? Simpson Millar's A-Z takes the confusion out of conveyancing so that the next time somebody asks you what the difference between a gazump and a gazang is, you will have the answer.
Assent – Document allowing the transfer of a property in accordance with a deceased owner's Will.
Bank Transfer Fee – A fee that is charged by lenders and solicitors for transferring funds by same day CHAPS transfer.
Boundaries – The extent of land your ownership stretches to as defined in the deeds plan.
Buy to Let – Buying a property with the intent of renting it out to tenants.
Caveat Emptor – A Latin term meaning 'let the buyer beware', which, when applied to conveyancing, indicates the buyer will assume the risk and should raise all necessary enquiries regarding the legal title and condition of the Property.
Chain – Where the purchase of property relies upon the sale and purchase of another, creating a sequence of buyers and sellers all depending upon the successful completion of the previous and successive 'link' in the chain for their own outcome.
Completion Date – the day on which property ownership changes hands – the seller receives the sale monies and the buyer collects the keys.
Contract – The legally binding document which states the terms and conditions of the property sale or purchase, one copy of which is signed by the seller, the other by the buyer.
Contract Pack – Your solicitor will require one of these from the vendor's conveyancer, so they can check that the seller has the legal right to sell. The pack will include a draft contract, Land Registry title documents, Property Information form, Fixtures and fittings form, building guarantees and any planning consents the seller has been awarded.
Conveyancing – The name for the legal process that surrounds the buying and selling of a property and the transfer of ownership. Whether buying or selling, it is a conveyancing solicitor's legal duty to protect your interests.
Covenants – The legal title to the Property may be subject to positive and negative obligations which must be observed by the owner.
Declaration of Trust – A legally binding document that sets out who owns what share of a property, along with other conditions such as who can decide when to sell, in arrangements where there is more than one owner.
Deeds – A historic legal document which deals with the transfer or mortgage of the Property.
Deposit – A percentage of the purchase price (usually 10%), which must be paid to the seller upon exchange of contracts.
Disbursements – Additional costs paid to third parties during the conveyancing process such as Land Registry fees, Local Authority search fees and Stamp duty.
Easement – The rights a person has to access or cross another person's land, such as right of way.
Encumbrance – Any matter which adversely impacts the legal title to the Property.
Exchange of Contracts – When the conveyancing solicitors for both parties exchange the contracts, the deposit is paid and the purchase of the Property on a fixed date becomes legally binding. This, in most cases, is now carried out by a telephone call between the solicitors.
Freehold – Absolute ownership of a property and the land it is built upon, as opposed to leasehold.
Gazumping – Despite previously accepting your offer on a property, the seller goes on to accept a higher one from somebody else. Although inconvenient and frustrating for the affected party, the seller is within their rights to do this so long as contracts have not been exchanged.
Gazanging – The seller pulls out, deciding not to move, even though they have previously accepted your offer.
Ground Rent – The amount of payment set out in a Lease that a tenant must pay to a Landlord for a leasehold property.
Joint Tenancy – Where 2 or more people have equal ownership of a property, with possession passing automatically to the remaining owner(s) in the event of another's death.
Land Registry – Government department responsible for recording ownership of land.
Land Registry Fees – Charged by the Land Registry – and payable by you – for recording ownership when you buy a property and carrying out pre-completion searches.
Leasehold – Ownership of a legal title carved out of a freehold, where a limited term of ownership is granted to a tenant. Most flats-owners will have a leasehold title, although you will also find some leasehold houses where a nominal rent is paid each year.
Local Authority Search – A request sent by your conveyancing solicitor to the local council for information regarding anything of significance recorded against your prospective property or the land it is built upon, which could affect your decision to buy (planning breaches, financial charges, etc).
Mortgage – Where a lender takes security over your property in exchange for the grant of a loan to assist in its purchase.
Negative Equity – The term applied when the value of a property falls below the value of the mortgage you borrowed to pay for it.
Property Information Form – Questionnaire filled in by the seller and detailing any issues with the Property or land that the buyer should know about prior to exchanging contracts. It is an offence to provide false information on one of these forms.
Redemption Fee – Penalty charged by a mortgage lender in the event of you paying off your mortgage earlier than agreed.
Reservation Fee – Paid to property developer to reserve a new build you intend to buy.
Searches – Undertaken by your conveyancing solicitor to discover any issues that might affect both the value of a property and your decision to buy it. These include Local Authority (obligatory), Drainage, Mining, Commons Registration and Pre-completion searches.
Stamp Duty – The tax you must pay to HMRC following the purchase of a property; the amount dependent upon its value. Late payment will incur financial penalties.
Subject to contract – A caveat decreeing an agreement to be (legally) non-binding until contracts have been exchanged.
Subsidence – Movement beneath a property caused by compromised footings or foundations, or a shift in the earth below. Requires costly underpinning to rectify.
Survey – Assessment of the condition of the Property carried out by qualified surveyors and engineers.
Tenants in Common – Where the joint owners hold separate shares in a property and can pass them on to other parties in the event of their death.
Transfer Deed – The document that transfers legal ownership of a property from one party to another.
Valuation – Carried out by and for the benefit of a mortgage lender, to gauge whether a property is worth the amount being asked for it.
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