Conveyancing explained

Conveyancing jargon

Bankruptcy Search

It is an offence for someone who is bankrupt to obtain credit so, if a mortgage is involved, this search is done against the names of the party by the party's solicitors.

Chain

The parties involved in inter-dependent property transactions, e.g. Mr A cannot buy Mr B's house until Mr A has sold his house to Mr C.

Completion

The date when the transaction relating to the sale/purchase of a house is completed, following the exhange of contracts. This is the date the buyer becomes the legal owner of the property.

Completion statement

A financial statement from the solicitor detailing all financial transactions. The statement includes all costs.

Conditions of Sale

The terms by which the buyer and seller agree to buy/sell the property. The Law Society (www.lawsociety.org.uk) sets the standard conditions. The lawyer sets any required special conditions.

Contract

The legally binding agreement specifying all details of the house sale or house purchase. This contract legally commits both the buyer and the seller to the transaction. The house seller's conveyancer draws up two copies of the same contract, and each party signs their own copy. When both parties are ready to legally commit, the two contracts are exchanged. After this point, neither party can withdraw from the transaction.

Conveyancer

The property lawyer who manages all of the matters arising from the sale of a house or the purchase of a house. This can be a Solicitor or a Licensed Conveyancer.

Conveyance (or transfer)

The legally binding document that transfers the rights of the land.

Conveyancing (or property conveyancing)

Conveyancing is the legal process of transferring property rights from seller to buyer (for a sale/purchase), or switching a mortgage from one lender to another (for remortgaging).

Council for Licensed Conveyancers

A regulatory body for conveyancing. All Conveyancers should be registered with the Council of Licensed Conveyancers.

Deeds

See Title Deeds

Deposit

The amount paid by the buyer at exchange of contracts, which is only refundable in exceptional circumstances. The deposit is usually 10% of the purchase/sales price but can often be negotiated to a lower level.

Disbursements

Services paid for by the Conveyancer on the buyers behalf such as stamp duty, land registry charges and search fees.

Drainage search

The Law Society recommends that drainage and water search is undertaken as part of every property purchase in England and Wales.

If problems arise and unidentified liabilities are exposed, it will impact on the property's value and result in unexpected maintenance bills.

Provided by regional water companies, the drainage search allows solicitors to identify concerns before purchase is completed.

Easement

A right given to a property owner over an adjacent property (e.g. a right of way).

Electronic Search

Electronic searches allow for a quicker turnaround time and discounted search fees.

Exchange of contracts

The point that both parties are committed to the transaction, before the completion date. A time and date is set to for both parties to exchange contracts, via their solicitors.

Fixtures and Fittings List

A list of the items at the property, detailing what is to be included or excluded from the agreed price.

Freehold

One of the two current tenures of land recognised by English law (the other is leasehold). This recognises the whole of the land not just a building.

Gazumping

When the house seller accepts a higher price offer from another buyer, after the initial offer has been accepted. This is considered to be unethical, but it is not illegal.

Gazundering

When the house buyer lowers his offer after the sale has been agreed. This is considered to be unethical, but it is not illegal.

Indemnity insurance

An insurance taken out by conveyancing firms to cover the risk of losses to clients that may arise from errors or fraud in dealing with their matters.

Land Registry

The Land Registry is the official body responsible for recording the ownership of land. (www.landregisteronline.gov.uk)

Land Registry fee

Fees paid by buyer's conveyancer (on the buyer's behalf) to register the ownership of property with the Land Registry.

Land Registry search

Not all property in England and Wales is registered with the Land Registry. This fee covers a search to check whether the property is registered or not.

Leasehold

The second current tenure of land recognised by English law. This is over a term of years and not forever. There will be a landlord who will own the freehold. This usually relates to a flat or apartment.

Leasehold Fee

There is a great deal of extra legal work involved when buying a leasehold apartment as compared with a leasehold house. This extends to issues such as the flat management company that looks after common parts and the much longer and more complex documentation that is required in a multi-tenanted property.

Legal fee

This cost covers the time your solicitor will need to spend on your conveyancing, as given in your quote.

If your sale or purchase does not complete then we will not charge you a legal fee.

Licensed Conveyancer

A Licensed Conveyancer is a specialist property lawyer – someone who is trained and qualified in all aspects of the property law.

Local Authority Search

A list of queries about the property that is sent to the local authority. It may include questions about:

• Planning applications on the property (but not the surrounding area)
• Whether or not it is a listed building or in a conservation area
• Who is responsible for access road maintenance

Very importantly, the local authority search does not give details on planning applications for neighbouring buildings.

Mortgage

A loan to help buy a house. The loan is secured on the property to prevent you selling the property without paying it off at the same time.

Mortgage advance fee

The amount of money that your lender has agreed to make available to assist you with the property purchase, secured by a mortgage over on the property.

We have to act and carry out work for both you and your new lender in connection with your new mortgage in connection with the purchase of your new home. This is the charge for the work we do for your lender and which your lender requires you to pay.

Mortgage deed

The legal agreement that gives the lender a legal right to the property.

Mortgage redemption

This is the amount of money required to pay off your existing mortgage at the date of completion of your sale.

Mortgage redemption fee

A penalty which can be charged by your existing mortgage lender if you pay off your mortgage early or you move to a different mortgage (remortgage).

We have to act and carry out work for both you and your existing lender in connection with the discharge of your current mortgage at the time you complete the sale of your home. This is the charge for the work we do for your lender which your lender requires you to pay.

Official copies and plan

These are official copies of the title deeds and registered deed plan (a diagram showing boundaries etc) of the property issued by the Land Registry.

Remortgage

When a borrower takes out a new mortgage with a new lender on the same property and repays the existing lender. Remortgages are usually used to get a better deal from the new lender or to to raise funds by increasing the size of the mortgage.

Searches

A method of checking matters that may affect the value of the property. The only mandatory search before exchange is a Local Authority Search, which covers items such as road maintenance, planning applications etc. The search covers the property itself, not the surrounding area.

Stamp duty, or SDLT (Stamp Duty Land Tax)

A government tax payable by every buyer of a property over £60,000. The tax is charged as follows:

• Property value £60,001 to £250,000 - 1% of the purchase price
• Property value £250,001 to £500,000 - 3% of the purchase price
• Property value over £500,000 - 4% of the purchase price

It is now payable on completion of a new form of tax return called a Land Transaction Return.

If the property is in a disadvantaged area and is sold for £150,000 or less, then no stamp duty is payable.

Stamp Duty Land Tax Form, or SDLT form

The Government introduced new legislation that replaced the old Stamp Duty and requires the completion of a lengthy form. This is something that we prepare for you to check and sign. It is an offence not to submit a duly completed form immediately following the completion of your purchase.

Structural survey

A survey giving details about the building and its integrity.

Subject to contract

A provisional agreement between the house buyer and the house seller that is not legally binding.

Telegraphic Transfer Fee

This is the bank fee for paying out the money on completion by CHAPS transfer to ensure that the money arrives on the right day. May be required when your mortgage completes. If you or your conveyancer request money to be sent by telegraphic transfer when your mortgage completes, we charge a fee which is currently £30. We may add this fee to your mortgage account.

Title Deeds

These are the documents which show who owns a property and also contain details of any other legal matters affecting the property, such as restrictions on the use of the property, rights of way and financial charges secured against it. The Title Deeds will vary in format depending on whether the property is registered or unregistered land.

Transfer document

The final document that transfers ownership of the property from the seller to the buyer.

Valuation survey

A survey to allow a property value to be determined for mortgage purposes. This is not to be confused with a structural survey. A valuation survey is usually required by mortgage lenders.