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Residential Property - Glossary of Terms – Jargon used in the UK

If you are buying or selling a property your Solicitor / conveyancer / will quite often refer to certain Terms / Jargon. The following is an alphabetical list used in the UK Property market.

Acceptance: The document that you will need to sign and return to a lender if you wish to accept the lender's mortgage offer.

Agricultural Covenant: This is a planning condition that permits the erection of a residential dwelling providing it is occupied by a person employed or associated with working on the land. Properties subjected to such a covenant are effectively "blighted" by this stipulation and values are relatively low because they cannot be sold to anyone who fails to meet the condition imposed, unless the planning authorities agree to lift the covenant.

Applicant: The term by which a potential purchaser is often referred to by estate agents / auctioneers.

Auction: A means of selling a property whereby it is listed at an auction and if the property does not reach the reserve price then it is not sold. If it does then the auctioneer's hammer falls that represents an exchange of contracts and the successful bidder is legally obliged to pay a 10% deposit and sign a memorandum of sale before leaving the auction. Usually completion takes places 28 days later and the buyer cannot re-negotiate any of the stipulated terms and buys the property "as seen". Structural surveys and searches would have to be made in advance by a bidder.

Beneficial Owner: Person owning land and entitled to it for his own benefit. Not, for instance, a trust that holds the land for the benefit of another.

Bridging Finance: A purchaser under certain circumstances may wish to complete the purchase of a property whilst still offering his own for sale. Lenders will advise as to whether the necessary temporary finance can be made available and the purchase can go ahead earlier. Some people use this means for a few days to enable them to move from property a to property b over a couple of days.

Caution: Entries on the land register protecting the interests of a third party. Any applicant for first registration of title is notified to him whereupon he can take appropriate action to protect his interests.

Charge: If a property owner uses his security in the property to service a loan, a charge is registered and certified. This entitles the lender to be regarded as a secured creditor to be paid out of the proceeds of a sale in the event of a default on the loan.

Charge Certificate: A certificate issued to a lender by the Land Registry giving evidence of the lender's charge over the property.

Chief Rent: A payment made on freehold land to the original freeholder forever. This is distinct from ground rent that has a limited period. (See also Freehold).

Collateral: Property pledged as a guarantee for the repayment of a loan.

Commission of Fee to the Estate Agent /Auctioneer: The sum of money paid to the agent, usually on completion, although legally it is payable on exchange of contracts.

Completion: The finalizing of the sale when all the monies are passed over and the purchaser gains access to the property.

Contract: Entered into by the vendor and purchaser of a property that only becomes binding on exchange of contracts, i.e. when both parties have signed the contract and the purchaser has handed over the agreed deposit (if any) to the vendor.

Contract Race: Involving two or more purchaser wanting to buy the same property. Either purchaser or vendor can instigate it although usually it is the latter. The winner is the first purchaser to exchange contracts.

Conveyancing: The legal process transferring ownership from vendor to purchaser.

County Court Judgment (CCJ): Whenever someone fails to pay for something and is subsequently taken to court, the magistrate may issue a County Court Judgement against that individual to pay the outstanding debt. It will only be removed once the debt is cleared.

Covenant: A legal requirement of the owner to do, or not to do, something in relation to the property. For example; restrictions on its use, changes to its appearance. Deeds: All the legal documents relating to the property. (See also Title Deeds)

Delayed Completion: Completion can take place anytime after exchange of contracts. However, if it is longer than 28 days it is referred to as delayed. Easement: A right over or under land granted to someone who is not the owner.

Engrossment: The formal and final version of a document prepared by a solicitor in readiness for signing and sealing following agreement of the final draft between the parties.

Equitable Interest: Legal rights in a property that do not include the right to sell its legal title.

Exchange of Contracts: The stage when the buyer and seller exchanged signed, binding contracts of purchase and sale. Both then become committed to complete the transaction.

Execution: Signing, sealing and delivering a deed in front of an independent witness.

Fixtures and Fittings: Any items that are to be included in the sale, e.g. carpets, curtains, curtain rails, wall lights, cooker etc.

Flying Freehold: A flying freehold is formed when part of a freehold property overhangs a different freehold property or land.

Freehold: Absolute ownership of land with or without Chief Rent.

Gazumping: A term used to denote a situation where the vendor has accepted an offer but subsequently accepts a higher offer from another purchaser.

Gazundering: A term used to denote a situation where the purchaser lowers his offer immediately prior to exchange of contracts.

Ground Rent: This applies only to Leasehold properties and is a sum paid annually to the Freeholder by the Leaseholder.

Improvement Grant: A grant made by the local authority towards the cost of repairing or improving property. Further information with regard to grants is available from your local council / authority.

Instruction: This term is used when the estate agent or auctioneer is formally instructed by a property owner to market the property, usually by private treaty, in order to find a purchaser. The resulting contractual agreement confirms the terms under which the instruction is offered by the vendor and accepted by the estate agent.

Joint Tenants: Two or more people holding property as co-owners. When one dies, his share of the property automatically passes to the survivor(s). (See also Tenants in Common).

Land Certificate: A certificate issued by the Land Registry as proof of ownership.

Land Registry: A Government department where details of properties with a registered title are recorded along with any charges e.g. mortgages.

Lease: Ownership of property by way of a leasehold interest for a fixed term, usually with an annual ground rent.

Leasehold: Ownership of land (normally for a fixed period - 99 years 999 years etc) subject to an annual payment of a ground rent to the owner of the freehold.

Lessor: The person / company who grants a lease - the landlord.

Lien: The legal right of one person to hold the property of another as security for a debt.

Maintenance Charge: The charge made, usually annually, by the landlord, to cover the costs of maintaining the property as set out in the lease.

Mortgage: Loan for which property is the security (usually for house/ property purchase for a private individual or now more and more common - Buy to Let property).

Mortgage Deed: The document incorporating the conditions of a loan secured on a property. Mortgagee: The lender - building society/ bank etc.

Mortgage Offer: The letter (advice) from the lender offering you the loan and setting out the terms and conditions upon which it is offered.

Mortgagor: The borrower - owner (whose property is secured for the loan).

Multiple Agency: A situation where two or more agents are acting for the vendor. The agent who introduces a successful purchaser is the only one paid. (See also Joint Sole Agency).

Offer: Make an offer on the purchase price with the intention of purchasing Part-Possession: The term used when a property is being sold, where a tenant has legal right of occupation.

Peppercorn Rent: A term used to denote a ground rent of a trivial amount.

Preliminary Enquiries: A set of questions raised by the purchaser's solicitor and sent to the vendor via his solicitor, prior to exchange of contracts. They ask for clarification of specific points about the property that is being sold and the present vendor's ownership of it.

Private Treaty (For sale by Private Treaty): The sale of property by private treaty is the method employed by most estate agents, preparing descriptive details of the property and quoting a definitive asking price. Details are circulated - post email, website local paper etc: potential buyers may view the property and either agree to buy at the asking price or submit an offer to purchase. Agreement to buy at this stage (for England and Wales) is subject to formal contracts being prepared between the vendor and the purchaser and those contracts being signed and exchanged between the two parties.

Probate: The official process of proving a will is valid. In many cases part of the estate will involve a property, which might need to be valued for Inheritance Tax purposes. A probate valuation is generally a negotiated value with the district valuer representing the Inland Revenue. A sale cannot proceed to exchange of contracts until probate has been granted.

Registered Land: Land (including buildings on it) the title to which is registered at the Land Registry and legal ownership is guaranteed.

Retention: An amount held back from the initial loan by the Lender until certain repairs or improvements have been completed or in some cases to cover possible road charges on a new estate

Right of Way: An individual's legal right to use any particular part of a property, in order to gain access to any particular part of his own property.

Searches: A term used to denote the physical and written procedure for determining any adverse effects in/on a particular property, whether already in effect or planned to take place.

Sitting Tenant: To occupy the property as tenant, but have legal rights without a lease. Any sale would be subject to any rights of a tenant who has occupation. A property with a sitting tenant can often have a much reduced asking price.

Sole Agency: Where only one agent has the authority to sell the property.

Sole Selling Rights: Where one agent has complete control of the sale, and is entitled to his fee however the property is sold.

Stamp Duty: This is the tax paid by the purchaser of a property to the Government in the UK. Currently based on the following rates:(from March 2006 Budget)Up to £125,000 - nil £125,001 to £250,000 - 1% £250,001 to £500,000 - 3% More than £500,000 - 4%

Subject to Contract: A phrase used as a provisional agreement before contracts have been exchanged where either party may still withdraw from the transaction. Often seen on estate agents boards.

Superior Lease or Head Lease: This is the lease that the landlord holds. This is often the case in an apartment/flat where the owner has the leasehold interest, but another individual owns the freehold. There is then this lease under which the Property owner is responsible for the obligations / covenants. When a property is let out the tenant renting a property then also has to comply with any of these obligations - e.g. not to hang out washing on a balcony etc.

Survey: Valuation, Home Buyers and Structural. Inspection of the property by an independent surveyor. The last one is the most comprehensive.

Tenancy at Will or Licence: After exchange of contracts a purchaser may seek to take possession of a property before financial, legal completion. This could be to carry out repairs and decorations or to take up residence early. This can often be organised and a licence arranged between both parties' solicitors. The purchaser paying an appropriate rate of interest on the balance of the outstanding monies (i.e. purchase price less deposit paid) instead of rental.

Tenant: A person, persons (company or organisation) who is entitled to occupy a property under the terms and conditions of a tenancy agreement.

Tenants in Common: Two or more people holding property as co-owners. When one dies, his share of the property automatically passes to his estate. (See also Joint Tenants).

Tender - For Sale by Tender: This is the situation where the asking price is not actually stated, but offers (in writing) are invited. Details of the property are prepared, circulated and advertised. The closing date for the tender is noted. In most cases the vendor will reserve the right to refuse the highest offer, thereby not being committed to sell. Offers tendered are usually opened in the presence of the vendor's solicitors, at a prescribed date and time. An acceptance of an offer by the vendor constitutes an immediate contract, and in most cases, the party tendering will have made their financial arrangements and have had a structural survey carried out in advance..

Tenure: Whether a property is freehold or leasehold. Title: The rights and liabilities that attach to the property.

Title - Absolute: The highest form of tenure available.

Title - Abstract of: A summary of title documentation used in the Conveyancing of unregistered properties to prove that the vendor has the right to sell.

Title Deeds: Legal documents describing the rights and liabilities that attach to the property and prove ownership of property.

Title Report on: Solicitors' certificate confirming that the title of the property is acceptable. A Lender must have one before an advance cheque for the mortgage monies can be issued.

Unadopted Road: A road which has not been accepted by a Local Authority possibly as a result of it not meeting the standards laid down (e.g. road surfaces, drainage etc.). This indicates the possibility of a road charge liability if and when the road is adopted.

Under Offer: When the vendor has accepted an offer for his home but contracts have not yet been exchanged. Either party may still withdraw from the transaction. The agent will often display a board saying "Sold subject to contract" at this point

Vacant Possession: The previous occupants must vacate the property before you move in, including any tenants. Vendor: The owner of the property to be sold. Writ of Summons: Mode of commencing legal proceedings.

See  also Check list for moving within the UK or out of the UK or to the UK from overseas CLICK HERE

The above has been compiled to assist people with rental terminology. We advise that this information is for guidance only and cannot be relied on for accuracy and that you should consult a qualified legal representative if you require full explanation. © jml Property Services June 2005

 jml Property Services June 2005

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