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Jargon Buster
Property - ConveyancingBUILDING REGULATIONS APPROVAL: work of a structural nature must have approval from the local authority under the Public Health Acts. Examples are: erection of an extension or a loft conversion. However sight of approved plans does not mean that the work has been carried out in accordance with the plans. See Completion Certificate. It may also be necessary to obtain Planning permission. CAVEAT EMPTOR: literally, buyer beware - the physical state of the property is the buyer's responsibility. You cannot take action against the seller for any problems related to the physical state of the property unless you can prove that the seller new of the defects and deliberately hid them. It is essential that you arrange for a survey to be carried out before you exchange contracts. THE CHAIN: most people moving house will have a property to sell and one to buy, and will want to coincide the two transactions. There may be several people in this situation and hence a chain of transactions will be formed. Generally, the longer the chain the longer it takes to reach exchange of contracts. Everyone has to wait for the last person to be ready. CHARGE: a mortgage is registered on the title as a charge. Also includes covenants, easements, cautions etc. The owner of the property is responsible for all charges no matter when they were registered. CHATTELS: items not fixed to the house; must be distinguished from fixtures and fittings. Can be difficult to decide which is which so a list of items to be left is usually completed by the seller. COMMONHOLD: intended to replace existing arrangements for the way title to a flat is held. The title for the building and land will be jointly owned by the individual owners of the flats. A community statement will determine the relationship of each flat owner but all lessees will have a say in the way maintenance is carried out. COMPLETION: moving day, when the money is paid to the seller's solicitors and the keys handed over. COMPLETION CERTIFICATE: this confirms that work has been carried out in accordance with building regulations. Often overlooked because the local authority will not issue one unless asked. CONVEYANCING: dealing with the legal side of buying a property; checking title, carrying out searches, etc. and ensuring that the buyer gets good title on completion. It does not involve negotiating the additional costs for loo roll holders, etc. but this does happen! COVENANTS: the title deeds will usually contain several covenants; these are a promise to do or not to do certain things on the land. Negative covenants should be obeyed, whereas positive covenants cannot usually be enforced once the property has been sold. A covenant to maintain a fence is a positive covenant. DEPOSIT: this is the money paid by the buyer to the seller when contracts are exchanged to show that the buyer is serious. If the buyer pulls out after contracts are exchanged they will forfeit the deposit to the seller. The amount of the deposit is subject to negotiation but is usually between five and ten per cent of the purchase price. The deposit is held by the seller's conveyancer until completion. The deposit paid on exchange is not connected with the balance of purchase money paid on completion, although in some cases the amount can be the same. DISBURSEMENTS: costs which you will incur and which we pay on your behalf; often lumped together with "legal fees". Usually include stamp duty, Land Registry fees, search fees etc. EASEMENT: a right over another person’s property or a right that they have over your property. This can be a right of way, a right of support, right of light etc. EXCHANGE OF CONTRACTS: this is the point of no return when both parties commit themselves to move on a certain date. Up to this point either party can withdraw without any liability to the other side. FREEHOLD TITLE: most houses have freehold title giving the owner outright ownership of the land. However see covenants above. GAZUMPING: where the seller asks for more money just before exchange of contracts. Only a problem when house prices are rising rapidly and much rarer than GAZUNDERING: Where the buyer makes a lower offer just before exchange of contracts. LAND REGISTRY: (formerly Her Majesty’s Land Registry) a government institution which records details of all properties bought and sold. A copy of the title is kept on the register, which is open to the public. The register records details of all covenants, easements and charges on the property, and recently the purchase price of the property. The Land Registry charges a fee for registering all transfers and mortgages. LEASEHOLD TITLE: flats and maisonettes must have a lease which sets out the responsibilities for maintenance etc. Positive covenants in a lease can be enforced by the freeholder, who can evict you in extreme cases. Although this is rarely invoked the threat gives the freeholder a great deal of power. All leasehold properties must have a period when the lease ends and it reverts back to the freeholder. LESSOR: synonymous with freeholder and landlord. MORTGAGE: any loan which is secured on a property. If you fail to keep up the payments the lender can evict you and sell the property to get their money back. If you still owe money after the property is sold the lender can pursue you until you pay it all off. MORTGAGE OFFER: this is a formal offer in writing. Vague statements from the lender or broker stating that the mortgage is 'approved' or 'through' are not good enough. You must have a formal offer in writing before contracts are exchanged. OFFICIAL COPY ENTRIES: these are up-to-date copies of the title showing mortgages,covenants, etc. It is essential to show a copy of these to the buyer's solicitors. These are obtained from the Land Registry by the seller’s solicitor; if they have the latest software these can be downloaded direct in a few seconds. PLANNING PERMISSION: this must be granted for change of use, eg. conversion to flats or erection of an extension which significantly increases the living area of the property. Not to be confused with building regulations approval. RETENTION: sometimes the lender will insist that money is held back from the mortgage advance until certain work is done. This is a vicious weapon since you will have to find the amount of the retention and the money necessary to carry out the work, at a time when you can least afford it. It is completely pointless, and a hangover from the days when "the lender knew best". SEARCHES: investigations with the local authority and other organisations, covering a variety of queries such as plans for new roads nearby, problems with planning permissions, building regulations, public health matters, and other similar queries. Note that the Local Authority search is specific to the property itself and will not give any information on adjoining properties. A search with the water authority will give drainage information, and an environmental search will give details of the previous use of the land and whether it is liable to flood, etc. STAMP DUTY LAND TAX: a government tax calculated on the purchase price of the property. It is not payable on chattels which can be apportioned separately in the contract; this can make a significant saving if this moves the price into a lower tax band, but the valuation of the chattels must be genuine. SURVEY: a report on the physical state of the house. Not to be confused with a valuation carried out by the lender which only gives an indication of the market price of the property. A Homebuyer's Report is a basic survey; a building survey is more detailed, but still does not include a report on the drains or central heating. VALUATION: the lender will employ a surveyor to inspect the property to ensure that it is worth what you are paying for it. You will have to pay for this, even if you do not see a copy (some lenders will refuse to provide this). The surveyor will often suggest that you obtain specialist reports to check out drains, woodworm, dry rot, etc. This can delay the legal process if you need to send copies of these to the lender before they confirm that the mortgage offer is unconditional.
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