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A
Aministrative Area
The term used by the Land Registry for the county and district or
borough in which the property is situated.
Adverse Possession
This happens when an occupier takes possession of and occupies land
without the permission of the owner. If this happens for more than
12 years, the occupier may be able to claim a possessory title to
the land.
Adverse Rights
Rights over land which are enjoyed by a third party but not for
their benefit.
Agent for the Seller
Usually the seller’s solicitor or lawyer, who holds the buyer’s
deposit on exchange of contracts to purchase land.
Agreement for Sale
A signed contract in writing for the sale of land agreed between
the buyer and seller containing all of the terms agreed between
them.
Apportionment
The proportionate sum of money that a person must contribute or
is entitled to receive. For example, on completion of the sale of
a leasehold property, it will usually be necessary to apportion
the rent and service charge due to the landlord between the buyer
and seller up to the date of the sale and thereafter, so that it
is shared fairly between them.
Assign
To transfer a right over, interest in or title to property to someone
else.
Assignee
The person to whom the estate, right or interest is transferred.
Assignment
The document used to transfer the estate, right or interest.
Assignor
The person who transfers the estate, right or interest.
B
Banker's Draft
A cheque drawn by a bank, usually on its own head office.It is generally
accepted as the equivalent of cash, although it needs to be paid
in through the banks’ “clearing system” in the same
way as any other cheque.
Beneficial Owner
A person entitled to receive the proceeds of sale of a property
for their own benefit, ie. they don’t hold them in trust for
anyone else.
Breach of Contract
Where one party to a contract fails to keep their part of the contract
with the other party.
Bridleway
A path over which it is lawful to ride or lead a horse, or ride
a bicycle, as opposed to a footpath.
Building Regulation Approval or Consent
Building work should comply with the standards laid down by the
Building Regulations in force at the time, even if it does not require
planning permission. The local authority is responsible for inspecting
and issuing any necessary building approvals or consents, although
the NHBC normally inspects any new house which is being built with
the benefit of an NHBC guarantee.
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C
Caveat Emptor
“Let the buyer beware”. It is up to the buyer to be aware
of what they are purchasing.
Certificate Of Title
A standard form provided by a mortgage lender used by a solicitor
or lawyer to request the mortgage advance.
CHAPS
“Clearing House Automated Payment System”. The system
allows for the payment of any amount to be transmitted electronically
by one bank or branch to another on the same day. This is the most
common method of transferring funds between lawyers on completion
of a property purchase.
Charge
A financial debt or liability affecting property. It is also the
name used by the Land Registry for a document creating a legal charge.
Chargee
Someone who has the benefit of a charge over property as security
for the repayment of a debt, eg. a mortgage lender.
Chargor
Someone who has charged their property with the repayment of a debt,
eg. a borrower.
Chattels
Items of personal property, such as furniture and moveable goods.
Client Account
A solicitor’s account with a bank, which is solely for money
belonging to a firm’s clients. Clients money must be kept separate
from money belonging to the firm.
Completion Date
The date inserted in the agreement for sale, being the date when
the seller is to vacate the property and transfer the title to the
land to the buyer.
Completion Statement
A statement sent by either the buyer’s or seller’s solicitor
to their client showing the money which has passed through their
hands in the course of the purchase or sale of the property.
Conservation Area
An area of special architectural or historic interest, which the
planning authority has decided to preserve or enhance because of
its character or appearance, and to which special planning rules
and requirements will apply.
Contract
A signed agreement in writing for the sale of land agreed between
the buyer and seller containing all of the terms agreed between
them.
Contract Race
Where a seller decides to deal with more than one prospective buyer,
with a view to exchanging contracts with whoever is ready first.
There are strict rules to be followed by solicitors in these cases.
Conveyance
The document that transfers the legal title in freehold land from
the seller to the buyer. It is used for unregistered land.
Conveyancing
The process by which an interest in land is transferred from one
party to another.
Counterpart Lease
The part of the lease that is handed to the landlord/lessor on completion
of the grant of the lease in exchange for the original. The counterpart
lease is signed by the tenant/lessee (and any guarantors of the
tenant/lessee), whereas the original is signed by the landlord/lessor.
Covenant
An agreement or promise contained in a deed, where a person agrees
either to do, or not to do, something.
Curtilage
A legal expression often used to refer to any ground that comprises
part of, or is attached to, a dwelling house, eg. a yard or garden.
D
Deed
A document executed with the necessary formalities to make it into
a deed.
Defect in Title
A flaw in the title to the property, eg. where the seller is unable
to produce a copy of a relevant deed.
Defective Title Indemnity Policy
An insurance policy to protect the owner and/or mortgage lender
against a defect in the title up to a financial limit specified
in the policy.
Deposit
The amount payable by the buyer on exchange of contracts to buy
a property. The deposit is a part payment and a guarantee that the
buyer will complete the purchase. If the buyer unjustifiably refuses
to complete, the deposit is forfeited and kept by the seller.
Disbursement
Costs such as search fees incurred by solicitors in the conveyancing
process. These costs will be passed on to the client.
Discharge of Mortgage
The repayment of a mortgage or the document which confirms that
the borrower has repaid the loan in full to the lender.
E
Easement
A right to use one piece of land for the benefit of another piece
of land.For example, a houseowner may have a right of way over his
neighbour’s land to reach his own house. The right of way is
an easement.
Engrossment
A legal document which is ready for signature by the parties. An
engrossment is normally typed or printed on good quality paper and
bound up with any plans or other documents which are referred to
as being attached to it.
Epitome of Title
A chronological index of documents which prove title to the land
to be mortgaged or sold. It is accompanied by photocopies of the
relevant documents.
Exchange of Contracts
The physical exchange of contracts which must take place in order
to bring a legally binding contract for the sale and purchase of
land into existence. The seller’s solicitor hands the copy
of the contract signed by the seller to the buyer’s solicitor,
in return for the buyer’s signed contract. This can be done
in person or by post, but is more often done by telephone.
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F
Fixtures and Fittings
Fixtures are items in a building or on land which legally are considered
to have become part of the land and are, therefore, subject to any
contract for the sale of that land.
Fittings are items which are not treated as having become part of
the land and so are not subject to any contract for the sale of
that land, unless the contract specifically includes them.
Items which are physically attached to the house or land,such as
fixed shelving or fitted cupboards, are usually fixtures.
Items which are not fixed are usually fittings.
Flying Freehold
A part of freehold property which lies directly over land belonging
to someone else and which gains structural benefit from doing so,
eg. where part of a house is built over next door’s garage.
Freehold
An estate in land which usually lasts forever.
Freeholder
Owner of a freehold interest.
Full Title Guarantee
A seller of land who uses these words will be confirming that, among
other things, he has the power to sell it and also that he is selling
it free from any charges, incumbrances or adverse rights which affect
the land, other than those which he has disclosed to the buyer or
which the seller does not and could not reasonably be expected to
know about.
Further Advance
An additional amount of money lent to a borrower by the same lender.
G
Good Leasehold Title
A lesser class of registered title than absolute leasehold title.
The Land Registry will award this class of title to a leasehold
interest when it has not seen the title to the freehold or to any
superior lease. This means that the Land Registry cannot confirm
that the landlord actually had the right to grant the lease in the
first place.
Ground Rent
The annual rent payable in return for a lease of land.
Guarantee
An agreement by which one person promises to meet the obligations
of another person, if that other person fails to do what he should.
Guarantor
A person who gives a guarantee. A guarantor is also sometimes called
a surety.
H
I
Incumbrance
A financial charge or burden on a property, such as a mortgage.
It can also mean adverse covenants or rights which affect a property.
Indemnity
An arrangement or agreement to protect someone against future loss,
damage or expense.
Indemnity Covenant
A promise to indemnify someone against future loss, damage or expense.
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J
Joint and Several
Where two or more parties to an agreement declare or agree to be
jointly and severally liable, they are agreeing that each person
accepts liability for the whole debt not just for a proportion of
it.
Joint Tenants
Property owned by more than one person is owned either as joint
tenants or tenants in common.
If the owners opt for a joint tenancy, then they each own the whole
of the beneficial interest, which means that the survivor of them
will have an automatic right to the property on the death of one
or others of them.
Under a tenancy in common, each tenant in common owns a specified
share of the beneficial interest. On the death of a tenant in common,
their specified share will be dealt with in accordance with the
terms of their will, or under the rules which apply on intestacy.
K
L
Law Society's Interest Rate
4% above the base rate of the Law Society’s bankers. The rate
is published in the Law Society Gazette.
Lease
A document by which a landlord grants a tenant the right to occupy
property for a fixed period, usually in return for a capital sum
or payment of rent.
Leasehold Property
Property held under a lease.
Legal Executive
Qualified and regulated legal advisers who specialise in a particular
area of law, particularly conveyancing. Legal executives are employed
in solicitors’ practices and cannot practise independently
of solicitors.
Lessee
The tenant granted a lease.
Lessor
The landlord who grants a lease.
Licenced Conveyancer
A person who holds a licence from the Council of Licensed Conveyancers
entitling him to provide conveyancing services.
Life Assured
The person whose life is insured under a life insurance policy.
Limited Title Guarantee
A seller of land who uses these words will be confirming that, among
other things, he has the power to sell the property, but the covenant
that the property is free from charges, incumbrances and third party
rights is not as extensive as that given by someone who is purchasing
with the benefit of full title guarantee.<
Local Search Delay Insurance
An insurance policy which enables exchange of contracts, completion
or remortgage to occur without a local search result. The policy
provides an indemnity against losses that arise due to an unknown
adverse entry found to be registered before the date of inception
of the policy.
Local Search Validation Insurance
An insurance policy which enables exchange of contracts, completion
or remortgage using an existing local search result which is not
more that 6 months old at the date of completion and which has not
been used on a previously completed sale. The policy provides an
indemnity against any unknown adverse entry registered between the
date of the existing local search result and the date of exchange
of contracts.
M
Managing Agent
Someone appointed to look after or manage property on behalf of
the owner, whose responsibilities may include collecting rent and
arranging for maintenance of the property.
Messuage
Often used to refer to a dwelling house and any buildings belonging
to it. It may also include any grounds or garden which forms part
of the property.
Mortgage
A deed by which a borrower charges his property as security for
the repayment of a loan.
Mortgage Advance
The mortgage loan.
Mortgage Indemnity
Mortgage indemnity insurance provides additional security for a
mortgage lender because it supports a mortgage advance which would
normally exceed its lending limits. The insurance usually covers
advances which exceed 70% or more of the valuation of the property.
The policy protects the lender (NOT the borrower) if the borrower
falls significantly behind with their mortgage payments and the
lender has to sell the property to repay the outstanding mortgage.
If the property is sold for less than the amount of the outstanding
mortgage, the lender can claim on the mortgage indemnity policy
to recover some of the loss.
The policy is a contract between the indemnity company and the lender,
although the premium for the insurance is paid by the borrower up
front or debited to the mortgage account. The only benefit to the
borrower is the ability to borrow more money than would otherwise
be allowed.
Mortgage Instructions
Instructions sent to a solicitor/ lawyer by a lender which detail
how the solicitor/lawyer should act in connection with obtaining
the mortgage.
Mortgage Offer
The formal offer of mortgage issued by the mortgage lender to the
borrower. It contains details of the amount of loan, the term over
which it is repayable and the terms and conditions of the loan.
Mortgage of Life Policy
A deed by which a borrower charges a life policy as security for
the repayment of a loan. It is also known as an assignment.
Mortgagee
A lender who advances money which is secured by a mortgage.
Mortgagee in Possession
A lender who has taken possession of a property mortgaged to it,
usually because the borrower has fallen seriously into arrears with
repayments. The lender will sell the property to repay the outstanding
debt.
Mortgage Protection Insurance
A life policy used in connection with a repayment mortgage which
pays out the sum assured on death of the life assured during the
term of the policy.
Mortgage Retention
A proportion of the mortgage retained by the mortgage lender when
essential repair work is required to the property. The retention
is released when the work required has been completed in accordance
with the terms of the mortgage offer.
Mortgagor
A borrower who provides a lender with a mortgage on his property
as security for a loan.
N
NHBC Guarantee
If a builder is registered with the National House-Building Council
(NHBC), the property being built will normally have the benefit
of the NHBC Buildmark Scheme, which provides insurance protection
against structural defects in the property for the first 10 years.
Negative Equity
The shortfall between the value of a borrower’s property and
the amount outstanding secured on the property.
O
Office Copy
An official copy issued by a public office, eg. the Land Registry,
of any deed, document or record held by it.
P
Party Wall
A wall separating two properties, over which each owner has rights
and responsibilities.
Peppercorn Rent
A nominal rent.
Perpetuity
For ever.
Personal Covenant
A personal obligation which is binding on the current owner of the
land.
Planning Permission
Formal permission granted by a local authority to carry out development
on land or to change its use.
Possessory Title
One of the classes of title the Land Registry may approve. Often
approved when the owner claims to have lost the title deeds, or
to have acquired ownership by adverse possession.
Power of Sale
The legal right of the mortgagee to sell the property.
Professional Indemnity Insurance
Insurance taken out by a professional firm, eg. solicitors, to cover
itself against claims for negligent acts, omissions or advice, up
to the financial limits detailed in the policy.
Public Footpath
A path over which the public has pedestrian rights of way.
Public Highway
A road over which the public has a pedestrian and vehicular right
of way.
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Q
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R
Redeem
To repay a mortgage or other debt.
Redemption Figure
The amount of money required to repay a mortgage.
Redemption Statement
A statement provided by a mortgage lender showing the amount required
to repay a mortgage at a particular date.
Rent
A periodic payment made by a tenant to his landlord.
Restrictive Covenant
A covenant which restricts the use of land, which is binding not
only upon the current owner, but also upon future owners of the
land.
Restrictive Covenant Insurance Policy
Insurance to protect the owner/mortgage lender against a breach
of a restrictive covenant, eg. where there is a house on land which
is subject to a covenant not to erect any building on it.
Roll Number
A borrower’s account number with a mortgage lender.
S
Seller's Pack
A government initiative to make home buying and selling easier and
quicker.
Service Charge
A regular payment made by a tenant for work done by the landlord,
eg. repair and maintenance of the property.
Stamp Duty
A tax payable to the government on the conveyance or transfer of
property and the assignment of a lease.
Subsidence
Reduction in ground support which may cause damage.
Successor in Title
A subsequent owner of property.
T
Telegraphic Transfer
The transfer of funds via a bank. Funds are usually transferred
via CHAPS. It can be used to transfer funds between solicitors on
completion of a property purchase.
Tenant
The person granted a lease.
Tenants in Common
Property owned by more than one person is owned either as tenants
in common or joint tenants.
Under a tenancy in common, each tenant in common owns a specified
share of the beneficial interest. On the death of a tenant in common,
their specified share will be dealt with in accordance with the
terms of their will, or under the rules which apply on intestacy.
If the owners opt for a joint tenancy, then they each own the whole
of the beneficial interest, which means that the survivor of them
will have an automatic right to the property on the death of one
or others of them.
Title
Claim to ownership of land.
Title Deeds
The deeds and documents which provide evidence of a person’s
right or title to a property.
Title Number
The reference number allocated by the Land Registry to each registered
title in land.
Transfer
The document which transfers the title in land to a new owner.
Tree Preservation Order
An order made by a local planning authority which prevents trees
from being cut down or lopped without permission.
U
V
Vacant Possession
Having no tenant or occupant.
W
X
Y
Z
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