Residential Conveyancing Glossary
This guide is designed to help you understand the different phrases and steps used in the conveyancing process.
Client Care Letter
This is our terms of business letter and contains a full breakdown of our charges and the service we will provide to you.
Contract
The legal document setting out details of the property to be bought/sold; the parties involved; the agreed sale/purchase price and any special terms and conditions previously agreed.
Contract Pack
This is sent out by the Seller’s Conveyancer and will contain the Contract above together with title information for the property including a plan and together with a completed Property Information Form and Fittings and Contents List including any guarantees, planning documents and if the title is Leasehold, information on the ground rent and any service charges payable.
Local Authority Search (when buying)
This contains questions asked of the Local Authority about the property you are buying to include the registers of Planning and Building Regulations; Tree Preservation Orders and Highway Adoption. This search only relates to the property you are buying as identified on the plan supplied and will not, for example, show proposed development in the locality.
Sewer and Drains Search (when buying)
This search will confirm whether or not the property is on mains drains and water and also usually provides a plan showing any mains services or drains running under the property. It will show whether there is a separate charge for surface water drainage from the property.
Environmental Search (when buying)
This contains useful information on previous known contamination of the land, whether the property is affected by Radon Gas and whether it is within 250m of a flood plain.
Chancel Check Search and Insurance (when buying)
Recent case law suggests that it is more important than ever to ascertain whether the property is affected by chancel liability. This is when the chancel at the local Parish Church needs repairs and, in certain circumstances, the property you are buying may be liable to contribute towards those repairs. It is usually advisable to insure the potential risk.
Additional Enquiries (when buying)
After checking the documents within the Contract Pack, additional enquiries may be raised to deal with any outstanding issues on the title or any of the documents applied.
Survey (when buying)
There are several types of surveys available. The most basic type is a valuation survey carried out by the Mortgage Lender. It is unlikely that the Buyer will have any redress if this survey does not reveal structural problems. If the property is over 10 years old we would recommend a Homebuy Survey which does go into more detail and contains recommendations which the Surveyor deems necessary for you to check before Contracts are exchanged. For older type properties and any property which is a listed building, we would recommend a full structural survey to ascertain the condition. As with any other service, the more detailed survey undertaken will cost more than a simple valuation. It would be worth approaching your Mortgage Lender to ask if you can upgrade their valuation which may be cheaper for you.
Pre-Contract Report (when buying)
This report, prepared by your lawyer, includes copies of all relevant documents received with an explanation as to what they are and how they may affect the property. We find from experience that it is best for our clients to peruse them at their leisure and then make an appointment with their lawyer to discuss any queries.
Mortgage Offer (when buying)
Contracts cannot be exchanged to make the transaction legal and binding until this is received. Usually you should receive your copy at the same time as your lawyer. It is important to check the terms and conditions to ensure you are able to comply as often we find special conditions are inserted which we may not be aware of. A usual condition is that any existing mortgage must be paid off before taking out the new mortgage. Your lawyer will provide you with a report further setting out the main terms and conditions but you should not wait until you receive this before you read the mortgage offer.
Exchange of Contracts
Whether buying or selling, this is the point of no return when after exchange the matter is legal and binding. A fixed completion date is agreed before exchange so that all parties are aware of the date they are moving. Your instructions will be obtained before Contracts are exchanged.
Deposit
It is a requirement of the Buyer to pay a deposit of 10% of the purchase price upon exchange of Contracts. This deposit is sent to the Seller’s Solicitors who will either hold the deposit until legal completion or use it on any related purchase by the Seller. In the event of default by the Buyer, as a general rule the deposit is forfeited to the Seller, and if a deposit of less than 10% has been paid the Buyer will be required to make up the difference.
Completion
This is the day when the Buyer draws down his mortgage (if applicable), pays the balance of the purchase monies and moves into the property. The Seller will move out of the property and his mortgage (if any) is repaid. The contract usually provides a cut off time of 2:00 p.m. on the day for the property to be vacant. Sometimes it is earlier than this. In cases where completion is delayed interest and penalties may be due as set out in the Contract.
Buildings Insurance (when buying)
The Contract which is currently in use provides for the Buyer to assume risk from exchange of Contracts. The insurance must (where a mortgage is taken out) be checked by your lawyer before exchange to ensure it complies with your mortgage offer conditions.
Buildings Insurance (when selling)
Although the Contract provides that the property is at the Buyer’s risk from exchange, the Seller must continue their insurance cover until legal completion to ensure they are fully protected in case of a claim.
Post Exchange Searches (when buying)
These are a Bankruptcy Search against you, as required only if you are having a mortgage, and a Land Registry Search. This search gives you priority at Land Registry to complete registration of your purchase without any further entries on the title. These searches are only undertaken just before completion.
Transfer Deed
Whether selling or buying this needs to be signed before completion by all parties to the transaction. Upon completion this together with any other Deeds and documents are sent to the Buyer’s lawyers. The Registration or change of the title at Land Registry cannot take place without this Deed.
Vacant Possession
Most properties are sold with vacant possession which means the Seller must have vacated on or before the latest time for completion (see completion). There must be no one remaining in occupation and the Seller must, as a general rule, clear the property of all his goods and rubbish except those included in the sale.
Leasehold Terms
Landlord
This is the person who owns the freehold of the property.
Tenant
This is the person named as the Tenant in the Lease and their successors. On completion the Buyer will become the Tenant.
Management Company:
Where the Freehold is owned by a Management Company the Management Company will manage the flats including repairing the common parts etc. The cost of these repairs will be recovered as service charge. The Management Company will also collect ground rent and buildings insurance premiums.
Assignment:
This is the legal document of transfer of the Leasehold property to the Buyer.
Share Certificate:
When a Leasehold interest is purchased, it may be a requirement of the original Lease that the Buyer takes out a share in any Management Company whose role is described as above.
If you would like a quote please call us on 01733 882800 or use the link below to send us an email.
Contact
conveyancing@hcsolicitors.co.uk
Please note that this guide is not intended to replace the specific advice given to you by your lawyer and is intended to be of a general nature; individual transactions may differ.
