Property terms

Advance - the mortgage funds sent by the lender.

Affordable housing - the generic term used to describe the Government's various schemes to help first time buyers onto the housing ladder, either on a shared ownership or equity loan basis.

Agreement - another word for contract.

Arrangement fee - a fee payable to a lender/broker for setting up a mortgage. It is usually payable on completion and can sometimes be added to the mortgage debt.

Auction - where a property is bought/sold at an auction house.  Once the hammer goes down contracts are exchanged (see Exchange of Contracts below).

Bank draft/Building Society cheque - the Bank/Building Society's own cheque drawn against your account with quicker clearance than a personal cheque.

Bankruptcy search - a search made to check whether a Buyer or Borrower has been, is, or is about to be, declared bankrupt.

Borrower - the person taking out a loan or mortgage on a property, sometimes also known as the Mortgagor.

Boundaries - these indicate the extent of the property and are usually marked on the ground by fencing or hedging.  Boundaries are also often - although not always - shown on deeds plans.

Bridging Loan - a bank loan to enable a new property to be purchased before an existing property is sold, and then repaid out of the proceeds of sale. A substantially higher interest rate than that of ordinary loans is normally charged. It is called a bridging loan because it "bridges" the gap between buying the new property and receiving the proceeds of sale of the other property (or the receipt of a mortgage).

Building Insurance - insurance taken out by the owner of the property to insure the property against risks such as fire, landslip etc.  The responsibility to insure the property often passes to the Buyer on Exchange of Contracts.

Buyer - the person that is buying the Property, sometimes also known as the Purchaser.

Buy-to-let - where a property is bought with the intention of letting it out on a commercial basis. There are mortgages specific to this type of purchase known as Buy-to-let mortgages.

Caveat emptor - Literally means 'buyer beware'.  The Buyer is responsible for finding out the condition of the property by survey and other enquiries and any matters affecting the legal title to the property by having their legal representatives check the title and carry out searches.

Chain - a situation in which successive buyers and sellers are reliant on earlier transactions being completed to make a sale or purchase effective.

Charge - another term for a mortgage to be fixed over the property.

Client - the person who has asked us to act for them in legal matters.

Client care letter - this sets out our terms of business and will be sent out at the beginning of the transaction.  The letter must give clear details of the work which will be carried out, who will be doing it, at what cost and the complaints procedure of the firm.  The Client is usually asked to sign and return one copy.  We are not allowed to start work for a Client until the Client confirms in writing that they wish us to do so.

Coal mining search - if the property is in an area designated as a coal mining area we will search to see whether there are any issues which currently affect the property.

Commonhold - a new and as yet rare way of owning Freehold land, intended to overcome difficulties associated with Leasehold ownership e.g. relating to shared facilities and obligations. Creating a Commonhold initially involves registration of the Freehold title as Commonhold, together with the formation of a Commonhold Association and a Commonhold Community Statement, setting out the rights and obligations of the unit holders.

Completion date - fixed date on which the sale and/or purchase is completed, i.e. the moving date. Completion may also take place "On Notice" when exchange of contracts takes place before a property has finished being built.

Completion statement - the statement we prepare which shows all income and expenditure involved with your sale or purchase, and what funds are due from you or due back to you.

Compulsory purchase - the acquisition by a Local Authority or other Government body of a property, perhaps against the owner's wishes.

Conditions of sale - the terms of the contract for sale and purchase including the rights and duties of the Buyer and Seller which may be national, statutory or laid down by the Law Society.

Consent to contract form - this is a form signed by an occupier of a property by which the occupier consents to the sale of the property by the Seller and confirms that he or she will move out of the property on completion day.  Sometimes this is a separate form and sometimes the consent is incorporated in the contract.

Consent to mortgage form by Occupier - this is a form used when a Buyer is buying a property in his/her own name but where, on completion, there will be a non-owning occupier also living at the property.  It is only required where the Buyer is having a mortgage.  The effect of the form is that the occupier is agreeing and accepting that, if the Buyer does not pay the mortgage and, as a result, is evicted from the property by the mortgage company through repossession proceedings, then the occupier also must simultaneously leave the property.  Separate legal advice must be given by an independent lawyer who is not acting for either the Buyer or the Seller.

Conservation area - an area protected by the Local Authority. Properties in a conservation area may be subject to planning restrictions, particularly relating to the exterior of the property.

Contract - a binding agreement (once signed and exchanged) containing all essential details of the transaction and committing the Buyer and Seller to complete the transaction.

Conveyancing - the term used to describe the legal process of buying and selling a property.

Covenants - promises to do or not to do certain things (for example to maintain a fence or not to play loud music after 11pm). They are often contained in a Lease or referred to in the Title Information Document. A Covenant is a legal rule that is binding on the property and the property owners.  Sometimes such covenants are broken and in that case there is a possibility that the current or future owners of the property may be held liable and suffer loss as a result of such breach of covenant.  For example, sometimes there is a covenant in the title deeds that states that no extension works may be carried out at the property unless the previous written consent of the original developer of the property has been obtained.  Sometimes owners build extensions in breach of such covenants and this would be an example of a breach of covenant.

Deeds/title deeds - legal documents that contain information about the Property. 

Defective title insurance - a defective title means there is a problem with the Deeds relating to the property - which may be missing, destroyed, lost or simply inadequate.  A Buyer will not usually buy a property with a defective title unless the Seller provides him with an insurance policy to protect him and his Lender against any financial loss which could result from the defective title.

Deed of transfer - the Deed of Transfer is a legal deed which is signed by the Seller and which operates to transfer legal title to the Buyer.  The Seller's lawyer gives this document, together with the Deeds, to the Buyer's lawyer on completion day.

Defective title insurance - this is an insurance policy which insures the owner and future owners against loss that may be suffered by them as a result of a defect of some sort in the legal title.

Deposit - the deposit is a sum of money paid by the Buyer to the Seller through their lawyers on exchange of contracts.  The deposit is part payment of the purchase price and is usually for the amount of 10% of the purchase price.  Very often, however, a lower deposit is paid, for example where the Buyer is obtaining a 95% mortgage, in which case the deposit would be 5%.  Where there is a chain of transactions, it is often the case that if the Buyer is selling a property at the same time as he or she is buying a property he or she will use the deposit received on the sale as the deposit payment on the purchase.  All these matters are arranged at the point of exchange of contracts.

Disbursements - fees payable to third parties during the conveyancing transaction, including Stamp Duty, Land Registry fees and search fees.

Domestic Energy Assessor (DEA) - a person responsible for the preparation of the Energy Performance Certificate, see below.

Drainage/water search - a search carried out by the Buyer's solicitors to check whether the property is connected to mains water and drainage and whether there are any other issues relating to drainage/water affecting the property.

Easement - Right given to the owner of a property over an adjoining property.

Energy Performance Certificate (EPC) - part of the Home Information Pack prepared by a Domestic Energy Assessor (DEA), reporting on the energy efficiency of the property.

Environmental search - a search carried out to check whether there are any environmental issues affecting a property.  These may include matters such as flooding, landfill and previous uses of the land.

Equity - the owner's financial interest in the property: its sale proceeds or estimated value less the amount owed on any mortgages.

Equity loan - an Equity Loan is a mortgage placed on a property in exchange for cash to the borrower. It secures a percentage of the value of the property and therefore the amount owed can go up or down depending on house prices.

Estate agent - the Estate Agent acts on behalf of the Seller to market the property.  They will prepare a set of details which are legally required to be accurate.  They will negotiate the sale between the Buyer and Seller and will prepare a Memorandum of Sale giving details of the Buyer, the Seller, their legal representatives, the price, and any additional terms agreed between the parties. This memorandum is sent to all parties to the transaction.

Exchange of contracts - the point at which both parties are legally committed to the transaction. Exchange actually takes place during a telephone conversation between the parties' solicitors.

Financial advisor - usually the person responsible for arranging the mortgage or finance to purchase the property and who will often arrange any life insurance, mortgage protection insurance etc.

First Time Buyers Initiative (FTBI) - enables first time buyers to buy a share in a home on a designated FTBI development with Government financial assistance (minimum £25,001). You don't have to pay anything on the amount the Government has contributed for the first three years.

Fixtures and fittings form - a list of items in the property which are included in the sale (completed by the Seller).

Flying freehold - the legal basis of flying freehold is unclear and is normally presumed to be unsound.  Flying freehold is where a property owner owns an area of property at first floor level or above but does not own the ground floor area underneath it.

Freehold or Leasehold or Commonhold - there are three types of legal title (legal ownership) of property. Freehold ownership is the ownership usually applicable to houses. Leasehold ownership is usually applicable to flats where the ownership is only for a specified period of time e.g. 99 years or 125 years. A third type of legal title called 'Commonhold' has now been introduced by legislation. This will apply to some flats.

Gazumping - where a Seller has agreed a sale price but then sells to another Buyer for a higher price.  This can only happen before Exchange of Contracts.

Gazundering - where a Buyer reduces his or her offer for a property after agreeing a price with the Seller.  This can only happen before Exchange of Contracts.

Ground rent - the rent paid to a Landlord on a Leasehold property.

Home Information Pack (HIP) - a set of documents intended to provide all relevant information to potential buyers to enable them to proceed immediately.

Joint tenants - where two or more persons buy a property they are either called joint tenants or tenants in common (whether the property is Freehold, Leasehold or Commonhold). Where property is held as a joint tenancy, if one owner dies the property passes to the other owner automatically without a Will.  If the property is held as Tenants in Common, each Buyer owns their own share of the property which can only be passed on by sale, under their Will, or the intestacy rules if they have not made a Will.

HomeBuy Direct - helps first time buyers to buy a home direct from a property developer with the help of an equity loan of up to 30% of the property market value. There is no interest to be paid on the loan for the first 5 years.

Home Ownership for people with Long-term Disabilities (HOLD) - helps people with long-term disabilities to buy a home on a part buy, part rent basis. You will own part of the home and will rent the other part from the Housing Association; your mortgage and rent will be funded by the benefits system. We can provide you with details of how to gain specialist financial advice.

Housing association - an independent non-profit body that provides low cost social and affordable housing for people in housing need.

Intermediate rent - this option offers you the chance to rent a brand new or refurbished apartment at a subsidised rent. The rent charge is normally 20-30% lower than what you would expect to pay for a similar apartment in the same area.

Key Worker - the precise definition of Key Worker has changed over the years, but broadly speaking a Key Worker is someone employed in a key public sector role such as nurses, teachers and the police.

Landlord - the owner of the freehold interest of a leasehold property. Rent on a leasehold property is paid to the Landlord who has the right to enforce the terms in the Lease.

Land Registry - regulatory body responsible for recording the ownership of land.

Land Registry fees - the fees payable to the Land Registry to register ownership of property and carry out certain searches.

Leasehold - the ownership of property for a fixed period in return for a rental payment and subject to terms and conditions for occupation.

Lease - the document entered into between a Landlord and Tenant when a property is Leasehold. It sets outs details of the term and the rent and contains various covenants and easements.

Lender - sometimes also known as the Mortgagee, usually a bank or building society which lends money to property owners.

Listed buildings - listed buildings are protected by law. Properties that are listed are subject to rigorous planning restrictions.

Local Authority search - a compulsory (if obtaining a mortgage) search carried out at the Local Authority and checking a wide number of matters that may affect the property. The search does not extend to the surrounding area.

London-Wide Incentive - is a shared equity product available solely to Key Workers across 15 developments in London. The Government retains a percentage in the home with no monthly payments due on the Government share until you sell the home or leave your Key Worker profession.

Management company - if a property is Leasehold there will often be a management company set up to deal with the day-to-day running of the property and repairs and renewals.  The management company collects a service charge from the property owners to pay for their services and for the upkeep and maintenance of the building.

Mortgage Indemnity Guarantee (MIG) - in high percentage mortgages this will be required to guarantee repayment to the Lender.

Mortgage - a loan that is secured over a property.

Mortgage deed - this is the document the Borrower signs to agree to the terms set out in the Mortgage Offer.  This document is sent to the Land Registry, which registers the Mortgage as a financial charge on the property, which is then shown in the charges register.

Mortgage offer - a written offer to lend money on a property.  The mortgage offer will contain all the terms of the Loan and the conditions upon which the money is loaned.

Mortgage valuation - the Borrower generally pays a fee to the Lender to have the property valued for Mortgage purposes.  This enables the Lender to take a commercial view on whether the property is worth what the Borrower says it is and whether it is suitable security for the mortgage.  The mortgage valuer will not necessarily inspect the physical condition of the property.

MyChoiceHomeBuy - is primarily for Key Workers and public sector tenants, although applications will be considered from other first time buyers with a household income of £17,600 to £60,000. MyChoiceHomeBuy enables you to buy a home of your choice on the open market by offering you equity of as much as 50%, or as little as 15%, towards the value of the home, depending on your needs.

National House Building Council (NHBC) - the regulatory body for new homes who issue a 10 year structural guarantee after inspection of new properties.

New Build HomeBuy - through New Build HomeBuy (previously known as Shared Ownership or part buy, part rent) you can buy a share in a brand new or refurbished home. You usually pay a mortgage on the part you own and a subsidised rent on the part you don't own. As your income rises you can increase the share you own, until you eventually own 100% and no longer pay any rent to the Housing Association.

New Build Shared Equity - this is exactly the same as MyChoiceHomeBuy, save that the purchaser has to buy a new property from a private developer rather than a second hand property (this is why you may see adverts from private developers such as Barratt or Ward Homes using the "HomeBuy" logo).

Office copy entries - a copy of the Land Registry entries detailing the property.

Ownhome - is provided by a partnership between Place for People and the Co-operative Bank. Ownhome is an equity loan of up to 40% to help you buy a home on the open market.

Open Market HomeBuy - this is an umbrella term for the current range of equity loan products which are: MyChoiceHomeBuy, Ownhome, New Build Shared Equity, HomeBuy Direct, London Wide Incentive and First Time Buyers Initiative.

Overriding interests - not all matters affecting property are registered or capable of being registered at the Land Registry.  Nonetheless the property is still subject to such matters.

Part-buy, part-rent - a term often used to describe a shared ownership scheme.

Pre-contract enquiries - these are a set of questions about the contract documents and the property sent by the Buyer's lawyers to the Seller's lawyers to deal with.  There may be questions raised which the Seller can answer and some which the Seller's lawyers can answer.

Property information forms - are usually completed by the Seller and his lawyers and contain general information regarding the property e.g. guarantees relating to the property, building works carried out at the property, a list of items that are included in the sale (e.g. carpets etc.).  The Seller must complete these forms to the best of his or her knowledge as they may be relied on by the Buyer in any subsequent legal dispute.

Purchaser - the person buying a property, also sometimes referred to as the Buyer.

Redeeming your mortgage - when a property owner pays back the mortgage on the property it is called redeeming the mortgage.  You will first need to get a statement of what is owed, which is called a redemption statement.  If you are paying the loan back early you may be charged a redemption fee.

Redemption figure - the amount needed to discharge a mortgage including any additional interest payable if the mortgage is paid off early.

Registered land - registration of land is now compulsory when it is sold, mortgaged etc. although this was not always the case (see Unregistered Land below). Land registered at the Land Registry provides a guarantee of ownership and does not depend on the safekeeping of a collection of old deeds and documents.

Registration of title - after completion, the details of the new owner of the property and any new mortgages are sent by the Buyer's lawyer to the Land Registry.  This information is recorded at the Land Registry and a fresh title certificate (title deed) is then sent to the Buyer's lawyer.

Rent to HomeBuy - enables you to rent a new build home at a discounted price, of a minimum of a 20% discount, on an Assured Shorthold Tenancy of between 2 to 3 years. At the end of your tenancy you can apply to buy your home on New Build HomeBuy terms.

Resale - this is the second hand sale or purchase of a shared ownership property that was built and sold in the past and is now available for purchase because the existing shared owners wish to sell.

Right to Buy/Acquire - a scheme whereby Social Housing Tenants can buy the home they currently live in with a discount from the Council or Housing Association.

Registered Social Landlord (RSL) - another term used to describe a Housing Association.

Searches - there are many different types of Conveyancing searches.  Which searches are needed for your property will be assessed at the outset of your transaction. These include:

• Local search - the result of the local search is supplied by the Local Authority and contains certain information held on Council records regarding the property, e.g. whether the road is a public road, whether the building is a listed building, whether any Council grants have been made that may be repayable to the Council, whether there are any outstanding Planning and Building Regulation Approval matters relating to this particular property.  It will not give information about planning applications or proposals for adjoining properties or the surrounding area.
• Environmental search - this search is supplemental to the local search.  It does not involve an environmental expert/scientist physically checking the property.  It is a search/check by the environmental search company of current and historic land use records up to a radius of 500 metres of the property with particular emphasis on land use that could result in contamination or could have resulted in such contamination.
• Water company search - the result of this search, which is provided by the local water company, deals with issues relating to drainage and water supply.
• Chancel repair search - as a result of a recent court case we should now carry out a Chancel Repair search to make sure that the property is not subject to an obligation to contribute to the repair of the local parish church.

Seller - this is the person selling the property sometimes also known as the Vendor.

Seller's property information form - A standard form completed by the Seller giving details about the property.  The contents of the form are legally binding on the Seller.

Shared ownership - this is the part buy, part rent of a property on the basis of a Shared ownership Lease.

Social HomeBuy - this is where the tenant buys their home from the Housing Association with a discount. They can buy outright or buy on a shared ownership basis, in which case they only get a proportion of the discount.

Social housing - rental housing (at a below market rent) provided by a Council or Housing Association to tenants who cannot afford to buy or rent in the open market.

Staircasing - the process of buying a further share, or the final share, of your Shared Ownership home.

Stamp Duty Land Tax (SDLT) - is a tax payable by the Buyer in connection with the property transfer. The tax is paid to HM Revenue & Customs. As a general rule it applies only if the purchase price of the property exceeds the current level set by HM Revenue & Customs.

Stamp Duty Land Tax form - a minimum 6 page long form, which comes with an even lengthier set of guidance notes, and must be completed for every transaction whether or not tax is payable.

Structural survey - a survey of a property to give details of its condition and any structural problems.

Subject to contract - the stage of a transaction before such time as Contracts are exchanged.

Surveyor - the person who is responsible for surveying a property (usually a member of the Royal Institution of Chartered Surveyors - RICS).

Telegraphic transfer/CHAPS - same day electronic transfer of funds from one bank account to another for which most banks make a charge.

Tenants in common - see Joint Tenants above.

Title deeds - are the legal documents that confirm ownership of the property and contain details of rights, benefits and obligations affecting the property.

Title information document - the official Land Registry document containing important details about the property, such as the owner, mortgage lender, easements, and restrictions.

Unregistered land - when ownership of land is not registered at the Land Registry, proof of ownership depends on production of a collection of old deeds and documents. There are rules concerning exactly what documents have to be produced to prove ownership of land and if this cannot be done, the title is said to be defective (see Defective Title Insurance above).

Valuation or survey - a valuation is a very basic report regarding the value of a property prepared by a qualified Surveyor, and this is usually prepared for the benefit of the mortgage lender. A survey is a more thorough report regarding the property prepared by a qualified Surveyor and this is normally prepared for the benefit of the Buyer.

Value Added Tax (VAT) - is a government tax charged on certain transactions. 

Vendor - the Seller of the property.