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Property Dictionary

dictionary

A comprehensive ‘Property Dictionary’ to help you understand the jargon whether you are selling, buying, renting or letting.

 

Asking Price

The price suggested by the seller and but usually considered to be subject to bargaining. 

 

Buying Agent

Buying agents are people or companies that offer to buy property on behalf of another party. There is usually a fee involved.

 

Chain

This is the sequence of buyers and sellers – most people who sell their property are also buying at the same time. Therefore there can be a chain of a number of sellers, which depend on each other for the sale and purchase of their new properties. For example, if one buyer or seller drops out, the chain may collapse, whereby the paperwork for the properties within the chain is delayed or cancelled.

 

Chain Free

This is when the owner of the property does not need to sell the property in order to buy another; therefore it is offered as chain free.

 

Completion

This is the day when you will move out of your property and the keys will be given to your buyers. The sale money will be transferred to your solicitor and you have successfully sold your house.

 

Completion Date

The date when the transaction (either the sale or purchase of a property) is completed, i.e. the date you become the owner.

 

Completion Statement

A statement from the solicitor detailing all financial transactions, including all costs.

 

Conditions of Sale

The terms by which the buyer and seller agree to sell/buy the property. The Law Society sets standard conditions. The lawyer sets special conditions.

 

Contract

The legally binding agreement specifying details of the house sale or house purchase. The contract legally commits both the buyer and the seller to the transaction. The house seller’s conveyancing lawyer 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.

 

Conveyancer

The property lawyer who manages all of the matters arising from the sale of a house or the purchase of a house. Can be a solicitor or a licensed conveyancer.

 

Conveyance of Transfer

The legally binding document that transfers the rights, burdens and the benefit of the land.

 

Council for Licensed Conveyancers

A regulatory body for conveyancing with whom all conveyancers should be registered.

 

Deeds

Legal title document which provides historical information about the property.

 

Deposit

The amount paid to exchange contracts which is only refundable in exceptional circumstances. Contracts provide for 10% of the purchase/sale price but can often be negotiated to a lower level.

 

Disbursements

Out-of-pocket expenses paid by the solicitor/licensed conveyancer on the buyer’s behalf, such as stamp duty, land registry charges and search fees.

 

Easement

A right given to the house owner over an adjoining property (e.g. right of way).

 

EPC

Energy Performance Certificates (EPCs) are needed whenever a property is: built, sold, rented. An EPC contains: information about a property’s energy use and typical energy costs & recommendations about how to reduce energy use and save money. An EPC gives a property an energy efficiency rating from A (most efficient) to G (least efficient) and is valid for 10 years.

 

Equity

This is what you actually own – the difference between the market value of your property and the amount of the loan you still owe to your lender.

 

Estate Agent

A person whose job involves selling and renting out buildings and land for clients for a fee.

 

E-Signature

Electronic signatures are legally binding. To find out more about security, legal and privacy of documents signed online click here.

 

Exchange of Contract

The point that both parties are committed to the transaction.

 

Fixtures and Fittings

A list of the items at the property, which are either included or excluded from the agreed price.

 

Flexible Mortgage

Mortgages that are flexible in terms of how you pay the loan back.

 

Floorplan

A floor plan is a simple line drawing showing rooms as though seen from above. Walls, doorways, and windows are often drawn to scale. When shopping for house plans or building plans, you may study the floor plans to see how rooms are arranged. However, a floor plan is not a blueprint or a construction plan. To build a house, you need a complete set of construction plans that will include floor plans, cross-section drawings, electrical plans, elevation drawings, and many other types of diagrams.

 

Freehold

One of the two current tenures of land recognised by English law. This recognises the whole of the land not just a building.

 

FSA

The Financial Services Authority (FSA) is an independent body concerned with consumer protection in the financial market.

 

Gas Safety Certificate

A gas safety certificate is required by law to be held for all rental accommodation in the UK where there are gas appliances present. The requirement is enshrined in the Gas Safety (Installation and Use) Regulations 1998. For more information on gas safety check out Gas Safer Register.

 

Gazumping

When the house seller accepts a higher price offer from another house buyer after the initial offer has been accepted.

 

Indemnity Insurance

An insurance taken out by conveyancing firms to cover losses to clients arising from errors or fraud in dealing with their matters.

Inventory

This is the compiling of the report that will protect all parties involved in the lettings process. An inventory is a comprehensive, detailed report on a property and its contents. An inventory outlines fixtures and fittings, overall decoration, describing and commenting on deficiencies/damages, cleanliness and the working order of certain items. Where accessible, utility meter readings are taken. Once the accuracy of the report is agreed, the report becomes a binding document.

 

Land Registry Fees

Fees paid by your conveyancing lawyer on the buyer’s behalf to register the ownership of property with the Land Registry.

 

Land Registry

A government office that stores records of land ownership and any charges, like a mortgage.

 

Leasehold

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

 

Licensed Conveyancer

A licensed conveyancer is a specialist property lawyer, someone who is trained and qualified in all aspects of the law dealing with property. Licensed conveyancers are sufficient to secure adequate protection for consumers and that the conveyancing services provided by such persons are provided both economically and efficiently.

 

Negative Equity

When the market value of a property falls below the outstanding amount of a mortgage secured on it.

 

Maintenance charge or service charge

Many leasehold properties (especially flats) are subject to such a charge which pays for items such as the insurance and maintenance of the building.

 

Money Laundering Regulations

Money laundering is how criminals change money and other assets into clean money or assets that have no obvious link to their criminal origins. Our policies require us to make relevant ID and proof of address checks on customers to ensure we are fulfilling our legal duties.

 

Mortgage Deed

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

 

Mortgage Fees

Normally charged by your financial advisor, for acting on behalf of your bank or building society.

 

Property Listing Sites

Rightmove, Zoopla and Primelocation. These are the main property listing sites in the UK and between them generate over 150 million enquiries a month.

PAT Certificate

Anyone who lets residential accommodation (such as houses, flats and bedsits, holiday homes, caravans and boats) as a business activity is required by law to ensure the equipment they supply as part of the tenancy is safe.

The Electrical Equipment (Safety) Regulations 1994 requires that all mains electrical equipment (cookers, washing machines, kettles, etc), new or second-hand, supplied with the accommodation must be safe. Landlords therefore need to regularly maintain the electrical equipment they supply to ensure it is safe. A PAT certificate will ensure you meet these regulations and provide a safe electrical environment for your tenants.

Redemption Fee

An Early Repayment Charge which can be charged by your existing mortgage lender if you pay off your mortgage early or you move to a different mortgage.

Searches

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

 

Stamp Duty

This is the “tax” that the buyer pays – the amount increases in line with the price paid – please see our blog on Stamp Duty for more information.

 

Survey

A report produced by a building surveyor for the purpose of determining the value of the property and if it is structurally sound.

 

Subject to Contract

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

 

Transfer Document

The final document that transfers the property from the house seller to the house 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.

 

White Hot Property

A property that has been acquired by a developer or financial institution as part of a part-exchange, repossession or probate transaction and is priced to achieve a quick sale.

 

 

 

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