Brief explanation of legal terms
Additional Enquiries: These are extra enquiries over and
above the standard property information form which a conveyancer deems it absolutely necessary to raise with
the seller's conveyancer.
Adopted Highway: A road maintained by the local
amount of a mortgage loan.
Apportionment for Fixtures and Fittings:
This is the allocation of part of the price of a
property to the value of contents that are being
included in the sale. For example you might agree that
of a £200,000 purchase price, £1000 was allocated to
carpets and curtains and £199,000 for the house. The
purchaser would then only pay Stamp Duty Land Tax on the
sum of £199,000. However, please note that it is illegal
to apportion more than the correct second-hand value of
the goods in this way, and Inland Revenue operate a
strict scrutiny over all such arrangements. It is illegal to make an
apportionment for anything classed as a "Fixture" (see
Assent: A formal document
of property to a person entitled to the property
following the death of the owner.
Assured Shorthold Tenancy: A special form of tenancy
agreement designed to simplify the process of obtaining
vacant possession of the property at the end of the
agreed tenancy period.
Attorney: Someone appointed formally to act on behalf of
another either generally or for a specific purpose.
Bank Transfer Fee: Fee charged for transferring money
electronically from one bank to another, usually on
Base Rate: The basic rate of interest
(usually of a specified bank) upon which other
interest rates are based.
Borrower: See mortgagor.
Brine Search: A search to establish if a property might
be affected as a result of disused
workings near the
Building Regulation Consent: Approval by the local
authority of the design and materials used in building
Buildmark Warranty: The Buildmark Warranty is a ten year
offered on many newly built properties that covers you in the event that the
property has not been constructed in accordance with NHBC
(National House Building Council) standards.
Capped Rate: A mortgage interest rate which is a
variable rate but capped at a maximum upper limit
usually for a limited period.
Cashback: A sum of money usually paid by cheque by the
lender on completion of a mortgage
that contains a
Chain: Where a property seller is also buying another
property this is a chain of transactions and some chains
can have many links.
Commons Registration Search: A
search at the local authority to check the property is
not registered as common land or part of a village green
resulting in third party rights over the property.
Completion Date: This is the date when the sale or
purchase of a property is finalised and the Buyer
obtains the keys and can move in. It is therefore
usually the same as the "moving date".
Completion Statement: A written calculation of all the
receipts and payments due in respect of the transaction
Contaminated Land: Land affected by contamination which
could arise from a past use of a property (e.g. oil
refinery) or by things stored on the property in the
past (e.g. petrol station).
Contract: The legally binding agreement incorporating
all the terms and - conditions for the sale of a property
made between the Buyer and the Seller.
Creeping Freehold: This
arises when part of the property is built below part of
another property so that the lower property owner does
not own the building or land above the "creeping" part.
Deed of Covenant: A
legally enforceable document confirming an agreement to
pay or do something.
Deed of Gift: A document transferring the ownership of
property from one person to another without any payment
being made for it.
Deed of Guarantee: A document used where one person
agrees to be responsible for
another’s debt or
mortgage obligations if that person fails to carry out
Deed of Postponement or Priority:
giving effect to an agreement by one mortgage lender to
another lender’s mortgage having priority.
Deeds: The official documents confirming who owns a
property which are in the possession of the owner or
mortgagee if the property is mortgaged.If
the title to a property is registered at Land Registry,
there will no longer be any physical “deeds”. Ownership
is recorded electronically .
Deposit: The agreed amount to be
paid on exchange of contracts.
the Buyer fails to complete the matter, the deposit (or
10% of the price, whichever is the greater) can be kept
by the Seller.
Disbursements: The word used by lawyers for the
necessary expenses such as search fees to be incurred
when buying a property.
Discounted Rate: A mortgage interest rate which will rise
and fall with the variable rate but which will always be
the discounted amount below the variable rate.
mortgage where you only pay the interest on the mortgage
together with a premium for an endowment assurance
policy. The policy is then intended to “mature”
providing a lump sum to pay off the original amount
borrowed at the end of the mortgage term.
assurance policy providing for the payment of a lump sum
on death or maturity.
Environmental Search: A search against a property to check
whether there is any record to suggest that the
property may be affected by contamination.
Equity: Usually means the
difference between the value of a property and the
amount owed to the mortgage
Exchange of Contracts:
is the moment when the contract finally becomes legally
binding, and the completion date (usually the same as
the moving date) is fixed. (For a newly-built property,
a builder will only give a firm completion date at this
point if your new home is already structurally complete.
Otherwise see "Completion Date" below.)
Fixed Rate Mortgage:
A mortgage interest rate where the mortgage lender
agrees to charge a fixed rate of interest over a given
period irrespective of whether base rate changes during
Fixtures and Fittings: Fixtures are those permanently
fixed items that can be regardedas part of the property
itself, for example trees and plants, gates,
kitchen/bathroom units, built-in cupboards,
fireplaces, gas fires, Aga’s etc. Fittings are essentially portable items that have
been attached with a view to easy removal such as
curtain rails, carpets, spice racks etc and which do not
damage the property if removed. It is important to
distinguish between them when making "apportionments"
and when deciding what you may or may not remove when
selling. A buyer is entitled to assume that no fixtures
will be removed unless the contract specifically permits
this to be done. Always ask us for advice if you are not
Flying Freehold: This arises when part of the property
part of another property and so the
upper property owner does not own the building or land
underneath the "flying" part.
type of land holding which is permanent and not
restricted as to its duration.
Freeholder: See Lessor.
Full Title Guarantee:
seller of a property must state the guarantee he is
prepared to give in the contract for sale. This is the
usual guarantee given by a property owner.
Further Advance: An additional
amount lent to a
Borrower under the terms of the original mortgage.
This is paid by a leaseholder to the landlord where a
property is leasehold and is usually expressed as a
High Loan to Value Fee:
is sometimes charged by a mortgage lender where a
borrower borrows more than a certain percentage of the
value of a property, to insure the lender against loss
arising if the property is sold by them due to the
borrower’s failure to pay the mortgage.
Index Map Search:
A search at Land Registry to see whether or not a property
is registered and if so to establish its title number,
and to check whether certain third party rights have
been recorded against unregistered land.
Interest Only Mortgage:
mortgage where interest only is paid to the Lender and
the capital amount of the original loan is repaid at the
end of the mortgage term by an endowment policy,
pension or other savings plan maturing.
Land Charges Search:
Search made in Land Charges department of Land Registry
to check for third party rights noted against the names
of parties to a transaction involving unregistered land.
Also includes compulsory Bankruptcy search against
Borrower on behalf of a Lender.
Landlord: See Lessor.
Land Registry: Central government body which maintains recordsof the ownership of land.
Land Registry fees: Fees payable to Land Registry for
registering changes of ownership and other matters
Land Registry Search:
is a final search carried out by the Buyer’s
at Land Registry to check that nothing new has been
registered against the property since the date of the
official copy of the register supplied to the Buyer’s
at the outset of the transaction.
Where a property is leasehold this is the document
giving the Leaseholder the right to possession of the
property for the term of the lease and setting out all
the rights and obligations.
Leasehold: Where the ownership of
property is for a limited period
only, commonly 99 years or sometimes 999 years.
Possession of the property will be subject to the
payment of an annual ground rent.
Leaseholder: See Lessee.
Legal Charge: See Mortgage.
Lender: Usually Bank or Building Society that grants a
loan by way of mortgage for the purpose of buying
Lessee: Where a property is leasehold the lessee means
the current owner of the leasehold property as opposed
to the freeholder or landlord who’s interest is subject
to the lessees right of occupation until the lease term
has come to an end.
Lessor: This means the landlord or freeholder who owns
the freehold title and is entitled to the ground rent
under the lease and to possession of the property at the
end of the lease term.
Limited Title Guarantee:
is the title guarantee given by a seller who, because of
his limited personal association with the property
cannot give Full title Guarantee (e.g. personal
representative/executor of a deceased owner or a
mortgagee in possession).
Authority Search: A search carried out at the local
authority to check whether there have been any notices
registered affecting the use of the property or any
proposals for the neighbourhood which may directly
affect the property.
Mining Search: A search to check whether the property
may be affected by
historical, present or future
coal mining activity which may result
Mortgage: Form of loan that is secured (attached) to
your property. This means the property cannot be sold
unless the loan is repaid in full. The Lender can also
sell the property if the repayments are not made.
Mortgage Deed: The
document signed by the borrower to create a legal charge
which the lender can register at the land registry.
Mortgage Offer: The
written offer setting out full details of the terms upon
which the mortgage lender is prepared to make the
Mortgage Term: The
length of time agreed for the repayment of the loan.
person or company that provides someone with a mortgage
loan (usually a bank or building society).
who takes out a mortgage (a borrower).
House Building Council: the independent regulator and
standard-setter for the new homes industry
Occupier’s Consent: Any
adult who lives at the property but who will not be
joining in the mortgage deed will be asked to consent to
the mortgage being taken out and to agree to move out if
the mortgage lender takes possession due to the default
of the mortgagor.
Party Wall: A
dividing wall owned jointly with a neighbour and
repairable at shared expense.
Planning Permission: Approval
by the local authority for building or change of use at
a property or extension to an existing property.
Power of Attorney: A legal document formally appointing
a third party to
act on behalf of another person as their attorney.
Private Road: A
road that is not maintained by the local public highway
authority, which often means it is maintained by
property owners in the road in question. The property
owners will need to have a specific legal right of way
over it as there will be no general public right of
Property Information Form: A
document completed by a seller to give information about
the property to the buyer (e.g. who maintains
boundaries, whether there have been any disputes etc.).
buying of a property.
Radon Gas: A
naturally occurring radioactive gas which may if above
certain safety levels require preventative action to be
taken (e.g. more ventilation in a property).
Redemption Figure: Final
mortgage settlement figure sent to Conveyancer when
completion date is known in relation to the SALE of a
complete repayment of an existing mortgage.
Redemption Penalty: A
penalty charged by a mortgagee for redeeming a mortgage
within a fixed rate, discounted rate or cashback period.
Registered Land: Property
which has already been registered at Land Registry.
a mortgage from one mortgagee to another.
freehold properties are subject to a rentcharge. This
means that payment of a specific periodic charge (e.g.
monthly or yearly) is “attached” to the property in
question and the responsibility for paying it will
automatically pass from owner to owner of that property.
It is usually created to ensure payment of a
contribution towards the upkeep of shared facilities on
an estate, such as communal parking areas and access
ways etc. The rent charge is usually payable to a
residents company or management company.
Repayment Mortgage: A
mortgage in which the mortgagor repays both interest and
some of the initial capital borrowed each month.
Reservation Fee: An
administration fee charged by some mortgage lenders to
cover the cost of reserving a borrower’s entitlement to
a loan on certain terms. Can also refer to a fee paid to
a builder to reserve a particular new property.
sale of a property.
who sells a property.
Service Charge: A
payment required by a lessor or managing agent to cover
the costs of insuring, maintaining and running a
development or block of flats (e.g. gardening, exterior
Smoke Control Order: An
order made by the local authority designating an area to
be one in which only smokeless fuels may be burnt.
Stamp Duty Land Tax: Tax charged by government when buying a property for £125,001.00 or more. It is charged at increasing rates for each portion of the price. You'll pay nothing on the first £125,000 of the property price, 2% on the next £125,000, 5% on the next £675,000, 10% on the next £575,000, 12% on the rest (above £1.5 million). From 1 April 2016, if you are buying a second home (as defined in the relevant regulations) the amount of duty will be increased. In that case, you will pay nothing on a purchase up to £40,000; on a purchase over £40,000 and up to £125,000 the duty is 3% of the whole price, on the next £125,000 it is 8%, on the next £675,000 it is 13%, and on the rest (above £1.5million it is 15%). Companies may also have to pay the higher rate of duty on the purchase of residential property.
a property moves due to inadequate foundations or severe
change to the underlying ground resulting in instability
in the structure, often evidenced by cracks in walls.
inspection and report on the condition and value of a
property by a qualified surveyor.
insurance which is for a period of time specified in the
search to establish whether the property may be affected
by tin mining activity which may result in subsidence.
owner’s right to a property.
Title Deeds: The
legal documents that prove the ownership of property or
land and contain details of rights and obligations
affecting it (applies to unregistered title only).
dealing with property (e.g. sale or purchase).
Transfer: Formal Land Registry
document used to transfer property between Seller and
Transfer of Equity: The
transferring of ownership of a share or interest in a
property from one person to another.
Preservation Order: An
order made by the local authority designating a tree or
group of trees as protected and requiring the local
authority’s permission to lop or fell them.
Unregistered Title: Where
the title to a property has not previously been
registered at Land Registry and ownership is proved by
the production of a complete chain of documents showing
Vacant Possession: Possession
of a property free of the presence of any people,
possessions or rubbish.
very simple form of survey designed only to establish
the market value of the property.
Variable Rate: A
mortgage interest rate which is variable and which is
set by each individual mortgagee.
formal agreement entered into with a property owner to
give a service provider (e.g. Electricity or Telephone
Company) a right for their pipe or cable to pass through
or over their property.