Glossary of terms used in a residential property transaction

Our glossary of terms is designed to help you understand the different phrases and steps used in the conveyancing process. 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 as individual advice may differ. If you would like further advice, a quote or to discuss a property transaction in more detail please contact your local Conveyancing Team on:

Peterborough 01733 882800
Huntingdon 01480 411224
Oundle 01832 273506
St Neots 01480 702207

Or email the Residential Property team directly.

Glossary of terms

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 supplied.

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.

Contract

The legal document setting out details of the property to be bought or sold; the parties involved; the agreed sale or purchase price and any special terms and conditions previously agreed.

Completion

This is your moving day. Generally speaking, the keys to the property should be at the Estate Agent’s by 2pm.

Deposit

On exchange of contracts, generally a 10% deposit is paid by the buyer to the seller (this will remain with the solicitors and is not paid direct to the individual). This should not be confused with the ‘mortgage deposit’ as this will vary depending on your own individual mortgage and this is paid to the mortgage company. As an example a 5% deposit is required if a 95% mortgage is required.

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.

Exchange of Contracts

This is the point where the contracts are made legally binding and a completion date is agreed. Once exchanged, you will not be able to withdraw from the contract. It is important to note that at this point, your buildings insurance on the property you are buying is on risk and active. You will be responsible for the property from this point onwards.

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.

Post Exchange Searches (when buying)

These are a Bankruptcy Search against you (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.

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.

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.

Pre Exchange and Completion

Instructions

Before any work is carried out by any solicitor, the client must formally instruct by completing various forms and having their identification confirmed by their solicitor.

Contract Pack

This is sent to the buyers solicitor and will contain the Contract, Property Information Form, Fixtures and Fittings List and Title Deeds as standard.

Additional Enquiries

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 supplied. The seller will be obligated to answer these.

Searches

These will be instructed on receipt of the contract pack and generally take 2-4 weeks to be returned. These consist of a Environmental, Chancel, Local Authority and Drainage Search.

Mortgage Offer

If you need a mortgage, contracts cannot be exchanged to make the transaction legal and binding until the mortgage offer 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 with them and that the amount you are borrowing and under which terms are correct.

Pre-Contract Report

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. You should ensure that you read this in full and let us know if you have any issues to raise.

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 Homebuyers 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 types of property and any property which is a listed building, we would recommend a full structural survey to ascertain the condition.

‘Caveat Emptor’

Means the consent of buyer beware means that you assume the risk that the property or any of the services, utilities, or fixtures or fittings could be defective or unsuitable for your needs. This rule however is not designed to shield sellers who engage in fraud or make a false or misleading representation about the quality or condition or the property. Therefore, you must ensure that you carry out a thorough inspection of the property, its services, utilities and fixtures and fittings before you proceed to exchange of contracts. If you fail to carry out the appropriate inspections and you move to completion, you will have no recourse against the seller if the property, it’s services, utilities or fixtures and fittings turn out to be defective

Leasehold Terms

Lease

This document is between the Landlord and the property owner which allows the owner to occupy the property for a specific period of time. This is generally for 99, 125 or 999 years. If the term of the Lease drops too low (anywhere from 50-70 years), it will need to be extended.

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.

Shared Ownership

Whereby you purchase a percentage of the property (for example 50%) and the remaining share is owned by a Housing Association. You would pay rent to the Housing Association on the remainder not owned. You could Staircase from the initial percentage brought to eventually own 100% of the property.