Chartered surveyor

A Royal Institute of Chartered Surveyors (RICS) surveyor who is qualified to carry out a survey on a property.

Completion date

This is when ownership of the property passes from buyer to seller. Usually it is after exchange, though simultaneous exchange and completion is possible.

Contract

This sets out the terms of the sale between buyer and seller. It is drawn up by the seller’s solicitor and will then be negotiated.

Deposit

Not the same as the deposit you agree to put down with your lender when you take out a mortgage. In the context of conveyancing, the deposit is the amount (typically 5 – 10%) paid by the buyer upon exchange of contracts. Once exchange has taken place the contract becomes legally binding and if the buyer fails to complete they may lose their deposit (unless they signed the contract because they were misled).

Disbursements

This is the fancy terms for “expenses” used by solicitors. Disbursements will include things like search fees and land registry fees. Check that disbursements are included in your quote (most are known in advance) otherwise your bill could be a lot higher than you expect.

Environmental search

A search carried out to check whether the property may be affected by things like flooding, landfill, waste disposal, contaminated land, etc.

Exchange

The exchange of contracts between buyer and seller. Once exchange has taken place the contract is legally binding and if the buyer fails to complete then they may forfeit their deposit (unless they were misled into signing the contract).

Fixtures, fittings and contents form

This is a form prepared by the seller setting out what fixtures and fittings are included in the sale, which ones may be included at a specified price and which ones are negotiable. It may be included in the HIP, but does not have to be and can be given after an offer has been made.

Freehold

When the property comes with the land on which it is built.

HIP

Home Information Pack containing information and search results for the property. HIPs are now compulsory and you are required to have a HIP before you market your property (some documents can be added up to 28 days after marketing starts).

Indemnity contribution

Solicitors must take out insurance to protect their clients in the event of mistakes or fraud when dealing with their case. This is usually charged to the client.

Land Registry

The body that records who owns what land. When a property changes hands it’s the buyer’s solicitor’s job to make sure that this transfer is recorded at the Land Registry.

Leasehold

A leaseholder owns the property, but not the land on which it stands, which is owned by the freeholder. Once the lease expires ownership of the property reverts back to the leaseholder.

Local authority search

A search of local authority records for things that may affect the property, such as: whether the road the property stands on is maintained by the council; planning applications that may affect the property; possible planning restrictions; and rights of way.

Ask your solicitor what area the local authority search covers. If it only covers a limited area you may want to ask for additional enquiries in relation to adjoining areas.

Mortgage

The loan from your bank used to buy a property. Because the mortgage is linked to the property being bought the property cannot be sold until the mortgage is paid off.

Mortgage deed

This is a legal charge giving the mortgage lender rights over the property until the mortgage has been repaid.

Mortgage fees

Fees charged (usually to the client) by their solicitors for acting on behalf of their client’s bank or building society.

Mortgage valuation

This is the valuation survey carried out by your bank or building society before they will lend on a property. It is to make sure that the property is worth at least the amount they are proposing to lend. It should not be confused with a property survey (of which there are different kinds) carried out by a Chartered Surveyor – see Surveys.

Property information form

A question form to filled in by the seller covering basic information about the property. The questions must be answered honestly.

Redemption fee

Some banks will charge a redemption fee for paying off a mortgage early or within a certain number of years of taking it out.

Redemption payment

The payment made in order to pay off the outstanding balance of a mortgage.

SDLT

Stamp Duty Land Tax – see Stamp Duty

Stamp duty

Also known as Stamp Duty Land Tax (SDLT). This is a tax on the purchase of a property and is usually paid by the buyer. The amount is based on the value of the property.

Surveys

A Chartered Surveyor will carry out a property survey at the request of the buyer. This can look at various things such as the structure of the building and is value. Depending on the kind of surveys costs vary significantly. (Not the same as the valuation survey carried out by a lender.)

Title deeds

The documents that prove ownership of a property and which set out any rights or obligations affecting the property. If the property is mortgaged then the deeds will be held by the mortgage lender.

Transfer deed

This document (referred to as a TR1) transfers ownership of the property from the seller to the buyer. It will be prepared by the buyer’s solicitor after completion and sent to the Land Registry so the transaction can be recorded.

Water and drainage search

A search to check whether the property is connected to the water supply and sewerage system and how the property is billed for its water and sewerage services.

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