Glossary of legal terms
A class of title that the Land Registry can give to freehold or leasehold land. It proves who owns the land.
ABSTRACT TITLE
List of all the documents that prove the
title of the land.
AGREEMENT OF SALE
A written and signed contract for the
purchase and sale of property or land.
ASSIGN
A transfer of right or an interest in
property from one person to another.
ASSIGNEE
The person to whom the right or interest of property has been transferred.
ASSIGNORS
The person to whom the right or interest
in property has been transferred.
BANKERS’ DRAFT
A cheque drawn by bank.
BENEFICIAL OWNER
The person of people who are entitled
to receive the proceeds or sale for their
own use.
BREACH OF CONTRACT
Where one of the parties to a contract
fails to keep to the terms and
conditions the agreement.
BRIDLEWAY
A path or a route, over which it is
lawful to walk, ride a horse or cycle.
CERTIFICATE OR REPORT ON TITLE
A standard form usually provided by a
building society, bank or a solicitors to
refuse the mortgage or loan funds
from the lender.
CHARGE
A loan of money, payment of which is
secured against land or property.
CLIENT ACCOUNT
The bank that we have which is only
for money belonging to clients. Client
money is kept separate from the rest of
the firm to safeguard it.
COMPLETION DATE
The date that the contract takes effect
and ownership of the property passes
from the seller to the buyer. This is also
usually the day when the seller is
obliged to move out of the property
and the buyer moves in.
COMPLETION STATEMENT
This is a list of the financial aspects of
the transaction that we have dealt with
on the monies that we have paid to
others (or to redeem a mortgage or pay
Land Registry fees etc.) It will also show
whether there is a balance of money
from the transaction that is to be paid to
the client, or whether there is a shortfall
that the client will need to make up
before we can complete the transaction.
CONTRACT
A written and signed agreement made
between the buyer and seller. It will
give full details of the property and all
of the other terms and conditions of
the sale that have been agreed.
CONTRACT RACE
When someone selling property
decides to deal with more than one
perspective buyer, exchanging
contracts with whoever is ready first.
CONVEYANCE
Formal document that transfers
freehold land or property from the
seller to the buyer.
COVENANT
An agreement contained in a contract
or a deed, where someone agrees to
do or not to do something.
DEED
A formal document that is executed by
signature, with the signature being
formally witnessed.
DEPOSIT
The money that is paid by the buyer
when contracts are exchanged. The
deposit is a part payment and a
gesture of good faith that the buyer
will complete the purchase. The seller
normally keeps the deposit.
DISBURSEMENT
Fees that must be paid to the third
parties such as searches.
ENERGY PERFORMANCE CERTIFICATE
Energy Performance Certificates tell
you how energy efficient a home is on
a scale of A-G. The most efficient
homes - which should have the lowest
fuel bills - are in band A.
The Certificate also tells you, on a scale
of A-G, about the impact the home has
on the environment. Better-rated
homes should have less impact through
carbon dioxide (CO2) emissions.
The average property in the UK is in
bands D-E for both ratings. The
Certificate includes recommendations
on ways to improve the home’s energy
efficiency to save you money and help
the environment.
EPITOME OF TITLE
A list of documents in date order that
prove title to the property being sold.
EVIDENCE OF TITLE
These documents prove that the seller
owns the property and therefore has
the right to sell it. Where the property
being sold is registered, certain
documents that are available on
request from the Land Registry must be
included in the Pack. These provide an
up-to-date official record of who owns
the land, and consist of:
Official copies of the individual register (made up of a property register, proprietorship register and, typically, a charges register)
An official copy of the title plan
EXCHANGE OF CONTRACTS
Contracts must formally change hands in
order to make them legally binding.
FIXTURES AND FITTINGS
Fixtures are items on a building or on
land that have become part of the
building or land and therefore included
in the sale. They are items that are
usually physically fixed to the building
such as shelves or fitted wardrobes.
Fittings are items that are not attached to
the building or land and are not subject
to the sale unless they are specifically
included. Carpets and curtains would
normally be thought of as fittings.
FREEHOLD
A type of land ownership which, in
effect, runs forever.
GROUND RENT
An amount paid by a leaseholder to
a landlord.
GUARANTEES
Promises by those issuing them as
regards their workmanship.
HOUSING ASSOCIATION
Non profit making body which can
assist in the homebuying process,
perhaps by taking a share of the
property to be bought.
HOME INFORMATION PACK INDEX
The compulsory documents include a
Home Information Pack Index, listing
the documents contained in the Pack.
The Index provides a checklist for sellers,
buyers, estate agents and enforcement
authorities. Where a document that
must be included in the Pack is
unavailable, the Index must say so, give
the reason it is missing, and indicate
what steps are being taken to obtain it.
Where documents are added to or
removed from the Pack at a later stage,
the Index should be revised accordingly.
INDEMNITY INSURANCE
You can insure against all manner of
things arising in a property transaction
e.g. your buyer or seller withdrawing, an
adverse search result, breach of planning
or building regulations and many other
events. It does not solve the problem,
but it does provide compensation.
INDEMNITY PREMIUM
Sometimes known as the high loan to
value fee. The borrower usually pays the
lender’s charge for this. In effect, it is
the payment of an insurance premium
to cover the loss a lender may suffer as
a result of having advanced a sum in
excess of 75% of the purchase price.
JOINT PURCHASE
Property can be acquired either as
beneficial joint tenants or tenants in
common. See points to remember.
LAND REGISTRY
A Government department that is
responsible for registering ownership
of land.
LENDER
Usually a bank or building society to
whom one applies for a loan/mortgage.
LOCAL SEARCH
Enquiry made of the local authority
about the property to be purchased,
but of a limited nature and addressing
only certain matters.
MAINTENANCE CHARGE
An amount payable by a leaseholder to
landlord, managing agents or
management company being the
leaseholder’s contribution towards
costs incurred in maintaining and
repairing the structure of a building
and its insurance.
MORTGAGE OFFER
Formal offer from your lender issued
after their valuation has been carried out
and income references and credit checks
have proven satisfactory. Issued subject
to conditions, the offer refers to the
gross advance i.e. the amount you pay
interest on, and the net advance i.e. the
amount you can put towards paying for
the property. Money is lent on many
terms. You can have fixed rate, capped
rate, discounted rate or variable rate
mortgages on a straight repayment basis
or endowment PEP or pension basis.
NEGATIVE EQUITY
Where the debts secured against a
property exceed its value making the
properties sale difficult.
OFFER
Can be used to refer to a mortgage
offer or your offer to purchase a
property at a set price.
PLANNING PERMISSION
Evidence of local authorities’
approval/consent to works undertaken
to a property.
PROPERTY INFORMATION FORM
Form that the seller completes giving
answers to questions raised on the
buyer’s behalf.
QUOTE
Available upon request to give you full
details of the legal costs you will incur
on moving.
REDEMPTION FIGURE
The amount a borrower owes a lender
to repay a loan.
REMORTGAGE
Where you take out a new mortgage
redeeming/repaying any existing
mortgage.
RETENTION
Money withheld by a lender until
certain works have been undertaken
and in some instances reinvested.
SALE STATEMENT
The sale statement should provide
some basic information about the
property, including:
The address of the property
being soldWhether the property is freehold, leasehold or commonhold
Whether the property is registered or unregistered
Whether or not the property is being sold with vacant possession
SEARCHES
Numerous searches are made by us in
the purchasing process which can
include local searches, coal mining
searches, environmental searches,
commons registration searches,
bankruptcy searches and many more.
Those considered appropriate are made.
The Home Information Pack must
include:
The local land charges register relating to the property being sold. If the search is carried out by the local authority, an official search certificate will be provided. Alternatively, a personal search company can be used.
Other records held by the local authority on matters of interest to buyers, such as planning decisions and road building proposals. These are referred to as local enquiries in the Home Information Pack regulations. A local authority or a personal search company can be used.
The provision of drainage and water services to the property. The local water company or a personal search company can be used, however, the search must comply with the HIP Regulations.
SELLER
Also known as the Vendor - the one
selling the property.
SERVICE CHARGE
See maintenance charge.
STAMP DUTY
Tax payable to Inland Revenue on a
purchase price in excess of £125,000.
SURVEY
A surveyor can undertake a basic
valuation, usually on behalf of a lender,
or a home buyer’s report undertaken
on your behalf and on which you can
place reliance.
TERMS OF BUSINESS
Available on request setting out what
you can expect of us.
TITLE
Investigated to ensure entitlement to
sell or mortgage.
TRANSFER DEED
Land Registry deed transferring
ownership of land.
VENDOR
See Seller.