Residential Conveyancing Vocabulary Explained
The legal process of buying and selling property in England and Wales comes with its own vocabulary. Don’t let it put you off – you should be able to understand what is happening in your conveyancing process!
We have done our best to explain some of the key terms involved, but if we’ve missed anything – or you need more information – please do not hesitate to contact us and ask.
The word Chain is used to describe the situation where there are a series of transactions dependent on each other. For example “X” is selling to “Y” who is selling to “Z” etc.Cleared funds are monies that have cleared in the practice’s client account, so that they can then be transferred on by way of electronic transfer.
The Completion date is the date when the sale and purchase of the property in question actually takes place. The completion date is agreed by the parties before exchange of contracts. Once contracts have been exchanged this date becomes fixed and legally binding.
The completion date is the day that you actually move.Otherwise known as an “Agreement”, the Contract is the document prepared by the seller’s lawyer and sets out the terms and conditions relating to the sale and will include details of the buyer, the seller, the property itself and the sale price.
Conveyancing is the process of legally transferring property ownership from the seller’s name to the buyer’s name.The Deposit is the sum of money paid by the buyer to the seller on exchange of contracts.
Normally the amount is 10% of the purchase price, but usually a deposit of less than 10% is agreed where the buyer’s mortgage finance is over 90% of the property purchase price.It is now compulsory for anyone wishing to place a property for sale on the open market to obtain an Energy Performance Certificate (EPC) which gives an energy efficiency rating for the property and suggestions on how to improve the property’s energy efficiency.
Exchange of Contracts is the process by which the seller’s and the buyer’s lawyer put the contract into legal effect and legally bind the seller and the buyer. The seller and the buyer can then no longer withdraw from the sale/purchase without incurring financial penalties.
Fixtures, Fittings & Contents Form lists those items the seller will leave at or take from the property. This document forms part of the contract and information pack that the seller’s lawyer send to the buyer’s lawyer at the beginning of the transaction.
An Indemnity Policy is an insurance policy usually issued on payment of a one-off premium, and often for a term of twenty years or more, designed to protect the insured against a defect in title, for example, breaches of building regulations.
A Local Search is a request to the Local Authority to provide any information that the Local Authority may have which relates to the property being bought. For example planning entries, financial charges and local road schemes, but does not cover any adjoining land.
The search can be applied for by direct application to the local authority or by a personal search.
A Mortgage Offer is the formal and official confirmation by a mortgage lender that it will lend money to the buyer to support his/her purchase and it will also set out the conditions upon which the mortgage money will be lent.
An Official Copy is an official printout from the Land Registry of the title/proof of ownership relating to the property being bought and sold.A Seller’s Property Information Form is a questionnaire the seller of a property completes and which forms part of the contract and information pack prepared by the seller’s lawyer at the outset.
Stamp Duty Land Tax is a tax paid by the buyer to the Inland Revenue based on the purchase price of the property bought.
Stamp Duty Land Transaction Return is a multiple page tax return now required to be completed by the buyer on all purchase transactions regardless of whether Stamp Duty Land Tax is payable. There are strict time limits for the submission of a properly completed form with Government Penalties for delay or errors!
A Transfer Deed is a document that both the seller and the buyer sign and which is presented to the Land Registry by the buyer’s lawyer when the application is made to change the name of the registered owner of the property.
Further Information on Buying Property
More information and guides to help you with the process of buying property in England and Wales
Buying A Home
To help you understand the process of buying your home, we have detailed the usual steps completed by the various parties involved.
We have uncovered many incidences where lies on sellers’ property information forms have caused problems in the buying process.
Part of the conveyancing process involves ‘searches’. We cover your choices in this area, and what they mean for you