Building Regulations Set the standard for all building work carried out in England and Wales. Even if building work does not require Planning Permission it must comply with the standards set out in the Building Regulations. The local authority is responsible for inspecting and issuing Building Regulation approval, although the responsibilty may be delegated, for example, to the National House-Building Council (NHBC) in the case of a new house which is being built with the benefit of an NHBC guarantee. If work has been done on a property that would normally require Building Regulation consent, you will have to provide evidence of this consent when the property is sold (including a Completion Certificate confirming that the work has been inspected and has been completed to the satisfaction of the local authority building inspector). Certain electrical/gas installations and replacement windows also require Buidling Regulation Approval (unless carried out by appropriately certificated tradesmen)
Caveat Emptor The legal rule which states that a buyer must rely upon their own investigations regarding the condition of a property and any matters affecting the legal title using surveys, searches and solicitors enquiries. Literally translated from Latin it means 'Let the buyer beware'.
Chancel Repair Liability An enforceable liability affecting some proprieties to contribute to the upkeep of the chancel of an ancient parish church. A search may be undertaken online (at a cost of £15.00 plus VAT) to establish whether a property may potentially be affected. Where there is a potential risk of liability, insurance may be arranged for a relatively modest one-off premium http://www.clsl.co.uk/index.php
Client Account The Bank account which holds money belonging to our clients. In order to safeguard clients' money it is kept separately from funds belonging to the firm. We will use money an individual has paid 'on account' when ordering searches etc.
Coal Mining Search A search required in certain areas to ascertain whether any coal mining issues might affect a property or the land it stands on. The Coal Authority can provide information as to whether a property is likely to need a Coal Mining search as part of the purchase process. http://www.coal.gov.uk/services/miningreports/index.cfm
Completion/ Completion Date This is the date that the buyer becomes the formal legal owner of the property as ownership passes from the seller to them. In most residential matters this is the date when the seller moves out of the property and the buyer moves in. This date can only be set with any certainty when contracts are exchanged (and even then some unusual circumstances could delay completion beyond the date set). It is not advisable to give notice on a rented property or to book removal firms until after exchange of contracts.
Completion Statement This is a list of all of the financial aspects of the transaction that we have dealt with on the clients behalf. It will give details of all of the monies that we have paid to others (to redeem a mortgage or pay Land Registry fees etc). It will also show whether there is a balance of money from the transaction that is to be paid to the client, or whether there is a shortfall that the client will need to make up before we can complete the transaction
Contract This is the agreement between the buyer and the seller. It sets out the main terms of what has been agreed such as the property, the price and the names of the parties. It also deals with the process if something goes wrong. Rather than making the buyer and the seller meet to sign the same contract, the seller's solicitor 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.
Covenant An agreement contained in a contract or a deed, where someone agrees to do, or not to do something
Deed A formal document that is 'executed' by signature, with the signature being formally witnessed.
Deposit On exchange of contracts the seller can insist on receiving from the buyer a 10% deposit of the purchase price. However as many people are not contributing as much as 10% to the purchase, reduced deposits are often agreed. You should be aware, however, that if you are a buyer and you pay a reduced deposit then fail to complete the purchase through no fault of the seller, you will, under the terms of the contract, be required to make the deposit up to the full 10%. You may also have to pay compensation to the seller if the seller loses out through your failure to complete.
Disbursement Fees that must be paid to third parties such as Local Authorities (for searches) and Land Registries.
Easement The right to use a piece of land that you do not own. If you have a right of way over a path or driveway that is owned by a neighbour, that is an easement.
Energy Performance Certificates They provide an energy efficiency rating with 'A' being the most energy efficient and 'G' the least. They also provide practical recommendations for increasing the property's energy efficiency. The Certificate is a required element of the Home Information Pack
Environmental Report This is carried out to check if there are any known environmental issues affecting the property, these include matters such as landfill or waste disposal sites in the area, if the property has been built on an old industrial site and whether there are any risks from contaminated land, toxic emissions, flooding, subsidence etc.
Exchange of Contracts Once contracts have been exchanged, both parties are legally committed to the transaction. This is a very important moment. From the minute contracts are exchanged, the matter becomes binding. From that moment on, the seller must sell, the buyer must buy, it must be done at the price stated in the contract. Until contracts are exchanged NOTHING is binding - either party can walk away from the transaction with no penalty.
Fittings Fittings are items that are not attached to the building or land and are not subject to the sale unless they are specifically included, e.g. carpets and curtains would normally be thought of as fittings.
Fixtures Fixtures are items on a building or land that have become part of the building or land and are therefore included in the sale. They are items that are usually physically fixed to the building such as shelves or fitted wardrobes.
Freehold A type of land ownership which in effect, runs forever. Where the vendor owns the freehold, they own both the property itself and the land it stands upon.
Full Title Guarantee Where land or property is sold with a full title guarantee, the seller is confirming that he has the authority to sell it and that it is free from any charges or adverse rights other than those that he has previously disclosed to the buyer
Ground Rent The rent payable for the lease of land
Incumbrance A loan or mortgage secured against the property. This can also include other agreements or covenants that apply to the property.
Joint Tenants The property is jointly owned so that all of the owners have an equal interest in the property. If one of the owners dies, then the survivors will automatically own the whole of the property. See also Tenants in Common
Land Registry A Central body that retains records of who owns the land, and under what conditions. This was set up in 1925, to simplify the conveyancing process. Not all land in England and Wales is registered today. This is partly due to the fact that land can only be registered following certain "triggering events". The Land Registry has their own website which provides useful information. http://www.landregistry.gov.uk/
Lease A document of agreement by which a Landlord grants a Tenant the right to occupy property, usually in return for a capital payment or rent. The lease is usually granted for a fixed and specified time.
Leasehold Property that is occupied under the terms of a lease. Where the seller owns the leasehold, they only have temporary ownership of the property and do not own the land upon which the property stands. Upon expiry of the lease, ownership of the property reverts back to the owner of the freehold.
Limited Title Guarantee Where land or property is sold with a Limited title guarantee, the seller is confirming that he has the authority to sell it. However, the freedom from any charges or adverse rights are not as complete as if it were being sold with full title guarantee. Limited Title Guarantee is often accepted if buying from Personal Representatives as they will have no real knowledge of the property in order to give the full title guarantee
Local Search Reveals details such as planning permissions granted and any plans to build roads in close proximity to the property. This is a list of questions about the property, which are sent to the local authority. It covers such items as, whether the road serving the property should be maintained by the council, whether there have been any planning applications on the property, and a number of other things. The search is against the property only and does not cover the surrounding area. A word of warning - the search will not show any Planning Permissions or matters affecting land or buildings outside the boundaries of the property. It is important that you let us know at the start of the transaction if you require information on any particular point or if you wish us to ask any particular questions of the local authority. We would not normally advise a buyer to exchange contracts without a satisfactory local authority search. The Search is a required element of the Home Information Pack
Managing Agent A person appointed by the owner of a property (usually a landlord) to act on his behalf, usually in collection of rents or maintenance of the property
Mortgage A deed by which the buyer of a property borrows money. The property is then taken as security for repayment of the loan. This is a loan to help you buy the house. The mortgage is 'attached' to your title deeds, and means that you cannot sell the property without paying it off at the same time. Contracts should not be exchanged until an acceptable written mortgage offer has been received. It is not enough that you have had verbal confirmation from you bank or building society that they will grant you a mortgage. If you are selling, we will contact your mortgage lender at an early stage to ask how much it will cost to pay off the mortgage - we will send you a copy of this statement. You may find that you will be charged a financial penalty if you pay the mortgage off early. This is a consideration to be taken into account when agreeing a completion date, and often applies when your existing mortgage was set up on a fixed rate, or you obtained a 'cashback' figure.
Mortgage Advance The money loaned under a Mortgage
Mortgage Offer The formal document making an offer of a loan under a mortgage which will say how much the loan is for, the period and amount of repayment and all of the terms and conditions attached to the loan. The Mortgage offer will normally be sent by the lender to the borrower, with a copy to your solicitor.
Mortgage Retention A sum of money not released by the lender until certain conditions have been complied with, for example, they may require that essential repair work is carried out. The remainder of the loan will be released when the work has been completed.
Mortgagee The lender who had made an advance of money under a mortgage. Usually a Bank or Building Society.
Mortgagor The person to whom money has been lent under a mortgage (the borrower)
National House-Building Council (NHBC) This will usually relate to a new or fairly new property, where the builder is registered under the NHBC scheme, and which provides some insurance protection against major structural defects in the property for 10 years after it was built.
Negative Equity The shortfall in the amount that a property can be sold for and the amount of Mortgage or loan secured on it, for example, if someone is only able to sell their house for £80,000 but have a mortgage with an outstanding balance of £90,000 they have a Negative equity of £10,000
Official Copy/Office Copy An official copy of a document held by a Public Office such as a Land Registry
Planning Permission Permission granted by a Local Authority to carry out improvements or developments on a property e.g. to build an extension. Approval by the local authority to the building or change of use or extension to an existing property
Redeem To pay off a loan or mortgage.
Redemption figure The exact amount of money needed to pay off a mortgage or loan. The redemption figure will include any penalties that are due (for example if there are penalties in your mortgage for paying it off early). The amount of the redemption figure can also change from day to day as many lenders add Interest on a daily basis and the amount of the redemption figure can also be affected by exactly when you made your last mortgage payment. Note that some lenders will charge interest on a monthly basis
Rent Charge Sum payable to a third party even though the property is freehold. Common in some parts of the country (including Greater Manchester) as a means of income for a former owner or, more recently, to enable covenants to be enforced
Sellers Property Information Form This is a questionnaire about the property completed by the sellers. It covers such items as guarantees, neighbour disputes and boundaries. If you are buying then time can be saved if you tell us at an early stage if there are any particular points about the property that concern you. We can then ask the seller's solicitors the relevant questions. If you are selling and the buyer's solicitor asks a question to which you do not wish to give an answer to, for whatever reason, it is essential that you discuss it with us. Failure to disclose information could give the buyer grounds for taking action against you.
Service Charge A payment made by a tenant/leaseholder to a landlord or his agent for repairs or maintenance to a property.
Stamp Duty Land Tax This is simply a tax charged by the government, and only affects you if you are buy property for more than £175,000. It is paid by the buyer. If you buy for exactly £175,000 you pay nothing in stamp duty; if you pay from £175,001 to £250,000 stamp duty is charged at 1% on the whole of the purchase price. From £250,001 to £500,000 it is charged at 3%, and above £500,000 it is charged at 4%.
Survey Report on the property commissioned by the purchaser. This is a report carried out by a surveyor on the physical state of the property you are buying. If you are buying a property you should be aware that the property is "sold as seen". It is for you, as the buyer, to discover any physical defects by means of inspections and surveys. Most houses are bought with the assistance of a mortgage and the bank or building society, will require a mortgage valuation. However, this is not a survey - it merely ensures that they property is of sufficient value to protect the lender's interest. Our advice is that you should at least have an RICS Homebuyer's Report prepared by a qualified surveyor. This will cost more than a mortgage valuation but it is advisable.
Tenants in Common Each owner owns a precise and specified share of the property and each is able to leave their share of the property by Will to whomever they choose. If the property is held as Tenants in Common, you must be specific about the proportions of ownership. e.g. Owner A is to own 30% and owner B is to own 70% See also Joint Tenants
Title Deeds Documentation providing proof of ownership and which set out the rights and obligations pertaining to the property. These documents firstly act as evidence that the person selling the property actually owns it, and secondly set out any rights or obligations that affect the property. If you are selling, then valuable time can be saved if your title deeds can be obtained by us at an early stage. If you have a mortgage then your bank or building society will be holding your title deeds. We will need to know your mortgage account number and the name and address of the lender. Some lenders charge a fee to send out your deeds but this will normally be added to your mortgage account.
Transfer Deed (TR1) The document which transfers ownership of the property from the vendor to the purchaser. This is the document that passes the ownership of the property from the seller to the buyer. It is dated with the completion date, and will be sent to the Land Registry after completion.
Vacant Possession Having no tenant or occupant
Water Drainage Search Details whether waste water from the property flows out into a public or private sewer and whether the property is connected to a public or private water supply. Also how the property is billed for the water and wastewater charges (either rateable value or water meter). Additionally confirmation whether the property is close to or is affected by water mains or public sewers. The Search is a required element of the Home Information Pack
