Chartered surveyor

A RICS (Royal Institute of Chartered Surveyors) surveyor is legally entitled to carry out surveys on properties.

Completion date

The date on which the ownership of the property passes from buyer to seller. Usually this happens some time after exchange, though it is possible to have simultaneous exchange and completion.

Contract

The contract sets out the terms of the sale. It will be drawn up by the seller’s solicitor, but will be subject to negotiations before being agreed.

Deposit

Not the same as the deposit that you put down when you take out a mortgage (e.g., you put down 20% and the lender lends 80%). In conveyancing, the deposit is the amount (usually 5 – 10%) paid by the buyer to the seller upon exchange.

Disbursements

This just means “expenses” such as the cost of search fees and land registry fees. Check that disbursements are included in your quote 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

Once contracts have been signed by both buyer and seller they are exchanged (swapped). 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

A form prepared by the seller setting out what fixtures and fittings (e.g., curtains, electrical appliances) are included in the sale, which ones may be included and at what 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 owner of the property also owns the land on which it is built.

HIP

A HIP or Home Information Pack contains information and search results for the property. HIPs are now compulsory and you are required to have a HIP before you market your property (though some documents can be added within 28 days of putting the property on the market).

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 Land Registry keeps records of land ownership. When a property is sold it is the buyer’s solicitor’s job to make sure that the 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.

Check the area covered by the local authority search. If it only covers a limited area you may want to ask for additional enquiries.

Mortgage

This is the loan used to buy a property. Because it is linked to the property being bought the property cannot be sold until the mortgage is paid off (either at the end of its term or, if you are selling, by using proceeds from the sale to pay off the balance).

Mortgage deed

The legal charge that gives the mortgage lender rights over the property until the mortgage has been repaid.

Mortgage fees

Conveyancing solicitors will, if acting on behalf of their client’s bank or building society, charge mortgage fees.

Mortgage valuation

Before your bank or building society before they will lend on a property they will have a valuation survey dont. This is to make sure that the property is worth at least the amount they are proposing to lend. It is not the same as a property survey carried out by a Chartered Surveyor – see Surveys.

Property information form

A questionnaire covering basic information about the property. The seller completes this and is legally obliged to answer the questions honestly.

Redemption fee

Banks will often charge a redemption fee for paying off a mortgage early. Sometimes this only applies for a certain number of years after the mortgage is taken 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 the tax charged by the government for buying a property and is usually paid by the buyer. The amount varies depending on the value of the property.

Surveys

Not the same as the valuation survey carried out by a lender. A property survey is carried out by a Chartered Surveyor and looks at things like the structure of the building and its value. There are different levels of surveys and their costs vary greatly.

Title deeds

Documents that prove ownership of a property and set out any rights or obligations affecting the property. If the property is still mortgaged they will be held by the 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 of the properties water and drainage supplies. It will check whether these are connected to the main water supply and sewerage system and how the property is billed for these services.

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