Jargon Buster

Chain

The chain is the word used to describe all the different parties involved in a conveyancing transaction e.g. Mr A is buying from Mr B who is buying from Mr C (here there are 3 in the chain). Generally, the longer the chain the longer it takes to reach exchange of contracts as everyone has to wait for the last person to be ready.

Completion date

This is the date when the sale/purchase of the property is completed. This is the date you move out and/or become the owner of your new home.

Or in the case of a remortgage, this is the date when your new mortgage will take effect.

Contract

The legal agreement specifying all of the details of the sale or purchase. It sets out the main terms which have been agreed such as a description of the property, the price and the names of the parties involved. The seller’s solicitor draws up two copies of the contract and each party signs their own copy. When both parties are ready to legally commit, the two contracts are exchanged.

Covenants

The title deeds will often contain covenants. These are obligations written into the legal title which either obligate or restrict the property owner.

Deposit

The amount paid to the solicitor for exchange of contracts, this is only refundable in exceptional circumstances. Contract deposits are 10% of the purchase/sale price but can sometimes be negotiated to a lower amount

Disbursements

Expenses paid by us on your behalf such as stamp duty, land registry charges and search fees.

Easements

This can either be a right given to the property owner over an adjoining property or a right in favour of an adjoining property owner over your property – typically a shared driveway.

Environmental Search

This search provides information in five key areas which are not covered by a local search. It covers such risks as Flooding, Radon, Contamination, Subsidence or active landfill sites within the vicinity of the property.

Exchange of contracts

This is the stage where all parties in the chain become committed to the transaction. From this moment on the seller must sell and the buyer must buy and it must be done at the price stated in the contract and all parties must complete (and if selling must move out) on the completion date. Until contracts are exchanged NOTHING is binding – either party can walk away from the transaction without a penalty.

Fittings and Contents Form

This is a list of the items at the property, which are either included or excluded from the agreed price. This form is completed at an early stage by the seller and sent to the buyer, so that both parties know what is being included in the sale price.

Freehold

One of the two current tenures of land recognised by English law (English law is the common law legal system of England and Wales). This recognises the whole of the land, not just a building. For more information click here.

Help to Buy ISA

Help to Buy ISAs are no longer available, but if you opened your Help to Buy ISA before 30 November 2019, the date new applications closed then you can keep saving into your account and earn a government bonus towards your first home. You will need to complete a First Time Buyers Declaration Form in order to receive the government bonus. We will arrange this for you.

Land Registry fees

Fees paid by us on your behalf to register the ownership of property with the Land Registry.

Land Registry

The official body responsible for recording the ownership of land.

Leasehold

The second current tenure of land recognised by English and Welsh 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. For more information click here.

Local Search

This is a search done on the property being purchased and consists of a list of questions about the property, which are sent to the local authority. It covers such matters as, whether the road serving the property is to be maintained by the council, whether there have been any planning applications on the property or whether there are any planning restrictions that may affect your intentions to renovate or extend the property.

N.B. Please note that this search only relates to the property being purchased, not the adjoining land.

Mining Search (Coal Search)

This is only undertaken if the property is in a coal mining area, for the purpose of ensuring that the property has not been affected by any mining activity.

Mortgage

This is a loan secured on the property. You cannot sell the property without repaying this loan.

Mortgage Deed

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

Mortgage Offer

This is the formal written offer of your mortgage which gives all the details and conditions of your loan. This will be sent out by your mortgage lender once all references and credit searches have been carried out, and a satisfactory valuation report received.

Plansearch

A Plansearch covers planning applications for a radius of 250m of the property. This means that information which could have a major impact on the enjoyment and value of a home is revealed to the potential homebuyer. The report details commercial and residential applications, both large and small, made since 1997. We will normally only carry out this search if specifically requested to do so by you.

Property Information Form

This is a questionnaire about the property which is completed by the seller. It covers matters such as boundaries, neighbour disputes and guarantees.

Early Redemption Penalty

This is a penalty which may be charged by your existing mortgage lender if you pay off your mortgage early or move to a different mortgage lender or product.

Redemption Figure

This is the balance outstanding on your existing mortgage. It will normally be sent to us by your mortgage lender in the form of a redemption statement.

Stamp Duty Land Tax (only applicable to properties in England)

Stamp Duty Land Tax, commonly referred to as Stamp Duty is a government tax which is payable on all properties over £125,000 unless you are a First Time Buyer.

To work out how much Stamp Duty you will have to pay visit the government’s Stamp Duty Calculator

If you are a First Time Buyer you can work out how much Stamp Duty you will have to pay here First Time Buyer Stamp Duty Calculator

N.B. On April 1st 2016 the Stamp Duty rates increased for all investment properties/buy-to-lets/holiday homes/second homes etc. You will pay the higher rate if you (or your spouse/civil partner) currently own or part-own another property anywhere in the world. For more information and details of exemptions please click here Stamp Duty For Additional Properties

Visit this website to calculate how much Stamp Duty you will have to pay: 2nd Home Stamp Duty Calculator

Structural survey

A survey giving details about the building and its integrity.

Transfer Deed

The final document which has the effect of transferring the legal title from the house seller to the house buyer.

Water and Drainage Search

This is a search that will tell you whether waste water goes into a public or private sewer and will produce a plan to show where water and drainage pipes are located.