residential conveyancing

Jargon-busting guide to buying or selling a home

Buying a new home is exciting. For most people it is the biggest purchase they will ever make.

Whether you are buying or selling, it can be a legal minefield. For a first time buyer and seasoned buyer or seller alike, the whole process can be very stressful.

Contacting a solicitor as soon as you think of moving home can reduce your stress levels a great deal.

Our solicitors are qualified in all areas of property law. As members of the Law Society’s Conveyancing Quality Scheme you can be sure we meet the highest standards.

We are happy to explain the process to you and will help you avoid potential problems. We take pride in ensuring your interests are protected.

This guide explains some of the terms used during the process of buying and selling a property. If you need any further help please do contact us.

Glossary of terms:

Assignment - Sometimes when a property is leasehold, the transfer document is called an assignment.

Auction - Some properties are sold at auction. Once the hammer falls the highest bidder is legally obliged to buy the house as this is the equivalent of the exchange of contracts.

Chancel Search - Some properties in England and Wales are situated within a local parish where the church council can charge landowners for repairs needed on church property. The Chancel search finds whether the property is situated in such a parish. In practice very few parishes exercise their rights to apportion costs of repairs but it is sensible to know if you may be liable.

Chain - The chain refers to the series of buyers and sellers dependent on the sale or purchase of your property and vice versa. If the chain ‘breaks’ it could lead to a delay or your transaction falling through.

Completion - This is the point whereby the property legally changes hands in exchange for the sale price.

Completion statement - This is a breakdown of costs sent by the solicitor to the client before completion. It details the various parts of the transaction(s). Any outstanding funds must be transferred before completion can take place.

Contract - This document sets out the terms of the agreement between the buyer and the seller. The contract is signed separately by each party and once exchanged by your solicitors, is legally binding.

Conveyance - The legal term for the transfer of property between people. It covers sale and purchase, lease extensions, and remortgages.

Covenant - This is a clause within a legal document that the owner is obliged to follow.

Deed - A legal document that requires a witnessed signature.

Deed of Variation - A deed that changes the terms of a lease.

Deposit - A lump sum paid to the seller’s solicitor on exchange of contracts to secure the property. The deposit is usually 10%.

Disbursements – The expenses incurred during the transaction by your solicitor. These include search fees.

Drainage Search - Enquires made to the local water authority to confirm whether the property is connected to the drainage system.

Environmental Search - A search aimed at finding any potential environmental issues in a property such as flooding risk and past contamination of the site.

Exchange of Contracts - Once the contract is exchanged, the buyer and seller are legally obliged to complete the transaction.

Fixtures and fittings contents form - A form the seller is required to complete stating which items are included in the sale of the property, such as curtains, carpets and light fittings.

Freehold - The name given to the ownership of the land a property stands on. It is freehold if the owner of the land also owns the property that stands on it.

Gazumping - If before the exchange of contracts, the seller accepts a higher offer from a third party than one they have originally accepted.

Gazundering - If the buyer threatens to pull out of the deal before the exchange of contracts unless the price is lowered.

Ground rent - A nominal annual amount paid by the lessees to the lessor.

Guarantor - Someone who agrees to meet any debts incurred by another person if they are unable to pay their debt.

Lease - A type of deed whereby the owner of a freehold property lets out the property to another for a certain price and a set period of time.

Leasehold - When land with a property on it is let out to someone other than the person who owns the freehold.

Lease Term - The period of time a Leasehold has been granted.

Legal Charge - The security a Mortgage Lender relies on when lending money on a property. If repayments are missed, the charge will usually allow the lender to sell the property involved.

Lessee - The person to whom a lease is granted. Also known as a Tenant.

Lessor - The person who grants a lease. Also known as the Freeholder.

Local Authority Search - A search carried out with the Council. It reveals any planning permissions on the property. It contains other useful information, e.g. if the road is maintained by the Council or is private. This search does not reveal any planning permissions on neighbouring properties.

Mortgage - A long-term loan given by a bank or building society and secured against a property.

Mortgagee - The lender of money to a buyer, usually a bank or building society

Mortgagor - The buyer, to whom money is being lent.

Negative Equity - When the value of your house falls below the value of your mortgage.

Official Copy Entries - An official copy of the registered title on property. There is a charge for gaining these which is paid by the Seller, with the copy given to the Buyer’s solicitors.

Pre-contract enquiries - Enquiries made on behalf of the Buyer by their solicitor about the property being purchased before contracts are exchanged.

Property Information Form - A questionnaire completed by the Sellers regarding any specific details about the property. This may include neighbour disputes, boundaries, proposed planning permission, etc. Failure to disclose information at this stage could lead to the Buyer taking future legal action against the Seller.

Redemption - The repayment of any existing mortgage against the property to its full amount (the redemption figure).

Registered land - A property that has already been registered with the Land Registry (this will apply to most properties changing hands since the early 1990’s).

Unregistered land - A property which hasn’t yet been registered with the Land Registry. Registration of property is now compulsory so your solicitor will do this if you are involved in a transaction.

Remortgaging - When a person with an existing mortgage changes to a new deal, whether this is due to a house move, releasing equity or to get more favourable terms.

Report on Title - A report compiled by the Buyer’s solicitor and given to the Mortgage Lender about the property. This is required before a mortgage can be agreed upon.

Repossession - When a Mortgage Lender takes possession of a home due to a failure on the Buyer’s part to keep up with repayment amounts. This is usually possible due to the Legal Charge made against the property.

Searches - Various searches are carried out on a property by the Buyer’s solicitor to obtain information about the land it is on, the local authority services, utilities and any potential problems. These searches usually incur charges. Most are required by the Mortgage Lender. If you are not obtaining a mortgage it is still advisable to get searches but not compulsory. Your solicitor will advise you on which ones you should get.

Service Charge - A charge usually associated with a block of flats whereby the leaseholder pays monies towards the costs incurred in maintaining any communal areas and shared services.

Stamp Duty Land Tax (SDLT) - A tax paid to the government on the purchase of a property with a value over a certain threshold amount.

Structural Survey - A survey carried out by an RICS qualified surveyor to assess the structural soundness of the property. This is the responsibility of the Buyer to obtain and is not compulsory. It is more detailed than a mortgage valuation which is carried out in the Lender’s interests.

Subject to Contract - This term is used to suggest that contracts have not yet been exchanged and so the sale of the property is not yet legally binding.

Title - The legal right to ownership of a property.

Title Deeds - The deeds that show legal ownership of a property.

Transfer - A form sent to the Land Registry notifying them of a transfer in the ownership of a property.

Unexpired Term - The length of time left on a lease.

Valuation - Carried out by an independent party to ascertain the value of the property at the time of the transaction.

Vendor - A term used for the Seller of the property.

Water Search - Similar to a drainage search but to assess whether the property is correctly connected to a mains supply.

Key players and their roles:

Estate Agent - The estate agent aids in the selling or letting of a property. They are instructed by the Seller or the Landlord and will market the property and negotiate with potential Buyers or tenants.

Usually charging the Seller between 1-3% of a property’s value on completion of a sale, it is in the Estate Agent’s best interest to sell the house at the highest possible price.

Once a Buyer has been found they will usually hand over to a Solicitor to take care of the legal side of the sale.

There is no obligation to instruct an Estate Agent in selling your house, especially if you already have potential Buyers lined up. However their expertise will usually ensure you get a fair price for your property quicker than you might without their help.

Land Registry - The definitive source of all data regarding property and land ownership.

The Land Registry is a government department where all transfers of ownership are registered and documented.

Mortgage Lender - Can be a bank or a building society who lend a Buyer money secured against a property (a mortgage).

This will be a percentage of the total value of the property with the rest being made up of the deposit.

The mortgage lender will independently assess the value of the property to ensure their investment is safe and will be able to repossess the property for sale if repayments of the loan are not kept to.

The mortgage lender will be chosen by the Buyer to suit their particular needs and will then usually liaise directly with the Solicitor during a purchase.

Solicitor - Amongst other things, your solicitor will act as a go between for all the stakeholders involved in your transaction, ensuring information is passed correctly between parties, documents have been correctly filled in and signed, funds exchanged and dates negotiated.

The legal aspect will also be carried out such as registering your property; preparing the contract and ensuring all property searches are carried out and reported on to the relevant parties.

Further reading:

Home Buyers Guide - Conveyancing Explained (Residential Conveyancing)

Selling Your Home Guide - Conveyancing Explained (Residential Conveyancing)

Sale and Purchase (Residential Conveyancing)

This article is for general information purposes only. It does not constitute technical, financial, legal advice or any other type of professional advice and is no substitute for specific advice based on your individual circumstances. We do not accept responsibility or liability for any actions taken based on the information in this article. For more information, please click here.