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RJM Legal Lingo Dictionary: Conveyancing



Conveyancing is a crucial aspect of any property transaction, but it often comes with a barrage of complex legal terminology that can leave homebuyers feeling overwhelmed. However, understanding the legal lingo in conveyancing is essential to protect your interests and ensure a smooth property transfer process. In this article, we'll demystify some of the common legal terms you might encounter during conveyancing.


C

  • Completion: when your legal representative transfers the remaining funds to the seller’s legal representative and you take ownership of the property


  • conservation area: an area with extra planning controls to protect its special historic and architectural elements such as original windows or doors. These controls are tailored to each area by the council. Find out if these controls apply to your area by contacting your local planning authority.


  • Conveyancer: legal executive, licensed conveyancer or conveyancing solicitor who does the legal work to do with transferring the ownership of land or buildings from one person to another. They will generally owe a duty to their client to take reasonable care when carrying out that legal work.


  • Credit score: a rating showing how likely a lender is to lend you money.


D

  • Decision in principle: a written statement from a lender to say that ‘in principle’ they would lend a certain amount to a particular prospective borrower.

  • Deposit: a payment passed on to your legal representative upon exchange of contracts, which represents a percentage of the purchase price.


E

  • Energy Performance Certificate (EPC): an Energy Label with a ranking of between A and G that also indicates running costs and suggests suitable improvements which can be made to a property to make it more energy efficient. An EPC must be provided to any potential buyer unless the property is exempt from EPC requirements.


  • Environmental Search: An environmental search will be carried out to check if there are any known environmental issues – for example if the property might be affected by a landfill or waste disposal site, if it is built on or near an old industrial site or if there may be risks from contaminated land, flooding or subsidence.


  • Exchange of contracts: when contracts are exchanged between buyers and sellers. Legally binding and commits the parties to the property sale/purchase.


  • Estate facility charge: an annual fee for maintaining the wider estate on which a property is located, e.g. for upkeep of public areas.


  • Equity: the difference between the property’s value and the outstanding debts you owe on it.


  • event fee: a fee payable under a term of, or relating to, a residential lease of a retirement property on certain events such as resale and sub-letting. An event fee is sometimes referred to as an exit or transfer fee.


F

  • Fixtures & Fittings: The seller will complete a form early in the transaction so the buyer can see exactly what is included in the sale. Everything at the property that is included or excluded from the price will be detailed.


  • Fittings: items in your property that are not fixed down e.g. carpets, curtain rails, free-standing ovens, fridges, freezers and washing machines.


  • Fixtures: items in your property that are fixed to the floor or wall, e.g. light fittings, built-in wardrobes, boiler, radiators, plug sockets.


  • Freehold: where you own the land and the buildings on it outright.

G

  • Ground rent: a payment generally made annually by the leaseholder to the freeholder under the terms of a lease. Historically many ground rents are set at a minimal ‘peppercorn’ rate; but it is also common for the lease to provide that the ground rent increases at intervals.


H

  • Home survey: a report to advise clients on the condition and matters relating to a property.


  • HM Land Registry: the organisation which registers the ownership of land and property in England and Wales.

I

  • Indemnity insurance: insurance that can be used during conveyancing transactions to cover a legal defect with the property that can’t be quickly resolved, or at all.


L


  • Lease: a document which sets out the rights and duties of landlord, leaseholder and any other party, such as a management company, who has rights and obligations in the lease.


  • Leasehold: where you own the right to occupy a property for a fixed number of years, typically 99 years or more.


  • Land Registry: The Land Registry keeps records of who owns the land and under what conditions. Not all land in England and Wales is currently registered but compulsory registration must take place following certain ‘triggering events’ (e.g. a sale, a mortgage). It is possible to voluntarily register land and there are benefits to doing so including reduced Land Registry fees. If you own land that is not yet registered call us to discuss this further


  • Land Transaction Tax (LTT): Land Transaction Tax is a government tax charged on properties in Wales. LTT replaced Stamp Duty Land Tax (SDLT) in Wales in 2018. The amount of tax you’ll pay depends on the purchase price of the property you’re buying (properties over £225,000.00).


  • Leasehold: If a property is ‘Leasehold’, it means that the property belongs to the owner for the duration of the lease but land it stands on remains in separate ownership. When the lease expires, the ownership of the property reverts back to the freeholder.

  • Local Authority Search: This is a series of questions about the property which that the local authority is asked to answer, ranging from whether the road serving the property should be maintained by the council to whether there have been any planning applications. The search only relates to the property, not to anything in the surrounding area such as planning permissions on any other properties.

  • Letter of engagement: sets out the terms of agreement between the client and their legal representative including client instruction, fees, timescales and other relevant information.

  • Listed building: listing marks a building’s special architectural and historic interest and brings it under the protection of the planning system. Depending on the category of listed building and the scope of alterations a householder may wish to make, listed building consent will need to be secured to make any changes that might affect the building’s special interest.

  • Local authority searches: a set of information about a property and/or land and the local area provided by the relevant authority.

  • LPE1 form: contains information about a property held by landlords, managing agents and management companies – for example, information on ground rent and service charges.


M

  • Mortgage: A mortgage is a loan to help you buy the house and is secured against your title deeds. This means that you cannot sell the property without paying off the mortgage at the same time


  • Mortgage Deed: This is the document that records that there is a mortgage on the property and it remains with the mortgage lenders until the loan has been repaid

  • Mortgage valuation: an assessment made by your mortgage provider as to whether they are willing to lend you money against a property. This is not the same thing as a survey.

O

  • Ombudsman: an official organisation appointed to investigate individual’s complaints against a company or organisation.

P

  • Property chain: linked property transactions, where a seller of one property is a buyer of another.

  • Property searches: a legal professional will conduct legal searches when you are buying a property to ensure there are no other factors you should be aware of. Some searches will be recommended by your legal representative for all purchases and others will be required by the mortgage lender to protect them from any liabilities that the property may have.

  • Property Information Form: All property sellers need to complete this questionnaire which covers essential information about the property, such as neighbour disputes and boundaries. If you are selling a property and the buyer’s solicitor asks you a question that you don’t want to answer, you should discuss this with us. If you fail to disclose information that could give the buyer grounds for taking action against you at a later stage

R

  • Redress scheme: all estate agents are legally required to be members of a redress scheme. Schemes may be able to resolve disputes between estate agents and consumers once internal complaint processes have been exhausted. More information is available from the government’s website.

  • Redemption: This is the final payment of a mortgage loan.

  • Redemption Fee: This is a financial penalty that might arise if a mortgage is paid off early.

  • Referral fee: A payment made from one business to another in exchange for referring customers to them.

  • Reservation fee: A payment made to a developer to secure a property.

S

  • Service charge: A contribution payable by a leaseholder typically to a freeholder or managing agent, for a share of the cost of insuring, maintaining, repairing, and cleaning the building.

  • Snagging: Defects or unfinished pieces of work in a new build home.

  • Sold subject to contract (SSTC): An offer has been made on the property and the seller has accepted it, but they have yet to exchange, so it is not legally binding.

  • Stamp duty/Land Transaction Tax: A tax paid upon purchase of any homes costing more than £250,000 in England, unless you are a first-time buyer.

  • Survey:

    • (home) survey – an agreed level of service to advise clients on the condition and matters relating to a property. The homebuyer’s survey should not be confused with a mortgage valuation. A homebuyer’s survey (full structure). Is a report on the condition of the building to identify any defects, recommended repairs and gives a valuation of the property.

    • (home) surveyor – it is advisable to employ the services of a qualified surveyor to conduct a homebuyer’s survey before purchasing a property.


T

  • Title: a legal document signifying ownership of a property. If you have a mortgage then the deeds will be held by your lender.

  • Transfer Deed: This is the document that transfers the ownership of the property from the seller to the buyer at completion. It will be sent to the Land Registry after completion so they can update their records.


U

  • Under offer – the same as ‘sold subject to contract’ – an offer has been made on the property and the seller has accepted it, but they have yet to exchange contracts, so it is not legally binding.

V

  • Valuation Report – carried out by the lender prior to issue of the mortgage offer.


W

  • Water Drainage Search: This records whether the property is connected to a public or private water supply; how the property is billed for the water and wastewater charges; it is connected to a public sewer or septic tank or other private disposal facilities and whether the property is close to or is affected by water mains or public sewers.

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