 Jargon BusterHome Buying & Selling Jargon Buster Additional Enquiries A buyer’s solicitor sometimes needs clarification of answers provided to Preliminary Enquiries, or they may simply think it appropriate to ask extra questions. Completion Date The day upon which all moneys are paid and the keys are handed over. Conveyancing The process of transferring the ownership of property from one person to another. Contract Deposit A sum of money paid upon contracts being exchanged. Usually 5% to 10% of the contract purchase price. If selling another property at the same time, it might be possible to pass onto your vendor the contract deposit that your purchaser pays to you. Check this with your solicitor. Covenant A legally enforceable written promise relating to property documents, including leases. A restrictive covenant may bar certain activities such as extending a property. In leases, covenants may require floors to be carpeted so as to reduce noise levels for others, for example. Draft Contract The document that is prepared by the vendor’s solicitor setting out the Title for the property that is to be sold together with the terms of sale. Exchange of Contracts Once the parties are satisfied that the Title is good and all of the other terms of the sale/purchase are understood and the necessary funding is in place, then both parties sign their part of the contract. Following this each solicitor sends their client’s part to the other side’s solicitor. Signing a contract does not bind a party to a sale or purchase. But once contracts are exchanged then the transaction becomes legally binding. On exchange of contracts the purchaser is responsible for buildings insurance. Freehold Property One that is held without any time limit FTB First time buyer. Gazumping Raising the price of a property or accepting a higher offer after having accepted an offer from a potential purchaser. Gazundering Lowering the amount of an offer to a vendor, usually just before exchange of contracts. Land Charges Search Local authorities carry out official local Land charge searches for solicitors and licensed conveyancers on behalf of purchasers. These searches are on the land as described or marked on a plan as submitted. Most searches for residential properties are "standard" ones. These reveal the local land charges register items – developments, extensions planned to neighbouring property, highways changes immediately affecting the property (if any). There are a further 22 optional enquiries which may be asked for and for which further fees will be required. Lease A contract for the occupation of a property. Leasehold Land or property held under a lease for a number of years upon which a ground rent is paid. Lessee Leaseholder – the owner of a leasehold property. Lessor/Landlord/Freeholder The person or Company who grants a lease and enforces its terms. Mortgage Offer The formal offer of mortgage defines the amount that is to be paid together with all other terms of the loan, including the term and initial interest rate etc. OEA The Ombudsman for Estate Agents – the independent Government-backed body that exists to protect the public from rogue estate agents.Check that you are dealing with an OEA member before complaining. If you want to make a complaint against a non-member then the OEA will not be able to help! Office Copy Entries For every land transaction in England and Wales, the Land Registry records details of ownership and charges onto a certificate called the office copy’. Whereas every transaction once might have entailed having to examine a pile of old transfers in order to establish good title, today the certificate from the Land Registry significantly reduces the amount of investigation that is necessary and, thus, the chances of error. Preliminary Enquiries Important questions asked by the buyer’s solicitor of the vendor’s solicitor before contracts are exchanged. Replies to Preliminary and Additional Enquiries The vendor’s solicitor’s replies to the questions raised. Often it will be necessary to ask a vendor to assist in responding. Stamp Duty A tax paid by the purchaser. Currently there is no Stamp Duty for purchases up to £125,000(Currently temporarily set at £175,000); 1% of the contract purchase price between £120,001(£175,001) and £250,000; 3% of the total contract purchase price if it is between £250,001 and £500,000; and 4% of the total purchase price where the contract sale price is £500,001 or above. Subject to Contract For the entire period between a sale/purchase being agreed and exchange of contracts, the transaction remains "subject to contract" which means that it is not legally binding upon either party to proceed to exchange of contracts. Either party is legally entitled to withdraw or amend the terms of the agreement for any reason. Title This is the right to ownership of a property. Title Deeds are the documents conferring ownership of land or property. In the vast majority of cases, where the land is registered, the Title Deeds will be the Land Certificate or the Charge Certificate issued by the land registry Vendor The person(s) selling a property. |