Conveyancing Jargon Buster
Chain – the line of buyers and sellers who are all involved in linked property transactions. A break in the chain can affect the sale of properties further down and can hold up transactions further along the chain.
Chain free – the purchase of a property that is not reliant on a property transaction of the buyer or seller. For example, a first time buyer is buying a property from a seller who is not intending to purchase another property.
Completion date – this is the day that you gain ownership of your property and you can have the keys and move in. You can also open that bottle of bubbly!
Completion statement – a financial statement confirming how much money is due back to you following completion or how much money is needed from you to complete the purchase.
Conditions of sale – the conditions that are agreed upon by the buyer and seller in the contract.
Contract – a legal document that outlines the important and specific details of the sale/purchase. The contracts will need to be exchanged to finalise the transaction. All parties need to sign the contract.
Conveyancer – a property lawyer that manages all of the legal aspects of the property transaction. At Watkins Solicitors this will be a qualified solicitor but this may not be the case in other firms.
Deeds – the history of the property is provided by these documents. Deeds are often now redundant because the vast majority of property in England and Wales is registered at the Land Registry. However, following a first registration, it may be that the owner of the property has retained the historical Deeds. Where the property is unregistered, the historical Deeds may be required by the conveyancer.
Deposit – the monies handed over by the buyer’s conveyancer to the seller’s conveyancer at the point of exchange of contracts. This is usually 10% of the sale/purchase price but it can be agreed to be a different amount.
Disbursements – additional expenses such as search fees, Land Registry fees and stamp duty which are to be paid.
Equity – the difference between the sale price of your property and the mortgage that is secured against the property. For example, if you sell your house for £100,000 and the outstanding mortgage is £80,000, the equity is £20,000.
Exchange of contracts – at exchange, the buyers, conveyancer and seller’s conveyancer agree a completion date and the transaction becomes legally binding.
Fixtures and fittings – the list of items which are included with the property and should not be removed from the property at completion.
Freehold – most houses in England and Wales are freehold. This means that you own the property for an indefinite period of time.
Gazumping – this is where the seller of a property accepts a higher offer of the property, despite having previously agreed an offer from a purchaser.
Indemnity insurance – in some cases, there may be legal defects such as the lack of a right of way or lack of a certification, for example for new windows, and this can be covered by a one time payment for what is known as legal indemnity insurance. This is an insurance policy that covers any potential losses which may arise from the defects.
Leasehold – most flats/apartments (and some houses as well) are leasehold. A lease is granted by a freeholder for a set period of time, for example, 99 years to 999 years, during which time ground rent and other payments such as service charge may have to be paid to the freeholder.
Mortgage Deed – this is a document which needs to be signed by the purchaser to confirm that they agree to the conditions of the mortgage offer. If the mortgage deed is not signed then the monies from the mortgage company may not be provided at completion.
Redemption penalty – if you decide to amend or cancel your existing mortgage contract, then you could be charged a fee for repaying the mortgage earlier than agreed. If you decide to switch the mortgage from one company to another again, a redemption penalty may be payable.
Searches – there are a number of different searches available to assist in checking that you have proper security of the property you are intending to purchase. The conveyancer will advise you as to which searches are necessary in respect of your transaction.
Stamp Duty – You must pay Stamp Duty Land Tax (SDLT) if you buy a property or land over a certain price. This is a Government tax and the current threshold is £125,000 for residential properties and £150,000 for non-residential land and properties.
Survey – if you are obtaining a mortgage then your mortgage lender will insist upon a basic survey to check the property but you may decide to have a more detailed survey. If you are purchasing a property without a mortgage, it is up to you whether you obtain a survey or not.
Transfer document – this is a document that finalises the move and officially passes the title of the property from the seller to the buyer.
If you have any questions or want to discuss further any conveyancing matter please do not hesitate to contact Kate Hunt – our conveyancing lawyer firstname.lastname@example.org.