Jargon Buster Glossary
| 1 |
Chain |
|
This is the term used where there are more than two parties to a transaction (ie just the seller and the buyer). Chains come into being when say for example, A is selling a property to B and B is selling their property to C who is selling some other property to D. Very often chains take time to establish as one party cannot move without selling their property first. Difficulties arise as the chain gets longer, as there is more chance for one party to pull out of a transaction, so resulting in a chain collapsing, or the transaction taking a longer than usual until another "link" in the chain is found. |
| 2 |
Chancel Repair Liability Search |
|
Search: Chancel Repair Liability Search
This search is commissioned to reveal whether or not the property you are proposing to purchase may be affected by a potential "Chancel Repair" obligation to the local Parish Church. Such obligations stem from mediaeval times where land, previously owned by the Church to fund the local rector, had been sold and the new owner took on the repairing obligation attached to that land. This means that any property located within the boundaries of a Parish where such a liability exists could be required to pay for a proportion of the costs associated with the upkeep of the Chancel of the local mediaeval parish church.
The Aston Cantlow v Wallbank case related to the Church seeking payment from the owners of the rectorial land to repair the chancel of the local mediaeval Church. The Wallbanks, as owners of the rectorial land (known as lay rectors), refused to pay what was originally a £6000 bill in 1991. The Wallbanks lost the case and on 5th February 2007 the House of Lords ruled that the final cost for repairs would be £189,969 +VAT as the structure has slowly disintegrated. This does not include the legal costs of approximately £400,000.
ChancelCheck® is an online search facility that screens for chancel repair liability at tithe district level. This service identifies a potential risk but does not confirm if the subject property is located on "liable land". However, to identify an actual risk would mean the registration of the property with the Land Registry and an increase in insurance premiums as an identified risk.
You have a number of options open to you should the search reveal that it is, indeed, located in a "risk tithe district".
Choose not to take any action as the risk is judged to be so low as for it not to be relevant
Carry out further investigation of the National Archive records to find out if the subject property is responsible for these repair costs. Such a search would cost a further £100 plus VAT and would not solve the problem if it is found to be responsible
Take out indemnity insurance to cover the possible costs of repair.
In such an instance Indemnity Insurance of the appropriate cover amount (normally commensurate with the price of the property) is recommended. You will note below that the search company Chancel Liability Services Ltd, offers this at various levels at modest cost.
Period of cover 25 years
Limit of Indemnity Residential
Premium (2 acres) Commercial
Premium (1 acre)
£250,000 £59.88 £155.88
£500,000 £80.88 £355.88
£1,000,000 £99.88 £555.88
Please confirm (if you are not obtaining a mortgage for the purchase of the property) whether or not you wish us to commission such Insurance for you.
Where you are obtaining Mortgage or other finance for the purchase, you actually have no choice, as your mortgagee will insist upon it as a precondition to your drawing down the advance.
We will include the cost of this in your draft Completion Statement and Commission the Insurance for you (and your Mortgagee) on Completion.
|
| 3 |
Chaps Costs |
|
Chaps Costs. This is the amount charged by our bank to transfer monies to other banks. £23 from our NatWest bank to other banks or £21 to another NatWest bank. |
| 4 |
Commercial Property |
|
Shops, offices, wharehousing,franchises etc. Please contact us if you are selling or buying a commercial property. We offer competitive rates and personal service. |
| 5 |
Completion Date |
|
Also known as completion, this is the day when you are contacted to move home. The ownership of the property transfers from the seller to the buyer. Very often buyers mistakenly assume that the estate agent sets this date. Please do not book anything before your solicitor has informed you officially of the completion date.
Only when contacts are exchanged a completion date is agreed. We will of course try to set a date that best suits you. Our advice is that you discuss with the buyer/seller dates which suit you both. If there is a chain involved then we may have to accommodate other parties. |
| 6 |
Completion Statement |
|
Before completion day we will calculate and prepare an account for you detailing all the financial movements on your case.
If you are buying then this statement will detail how much money is required from you prior to completion. We take into account all money received from you and all money paid out or to be paid out.
If you are selling then this statement will be prepared on completion. After paying off all costs and mortgage (if any), surplus money will be returned to you on the same day. |
| 7 |
Contract |
|
The agreement made between seller and buyer is called the contract. This document contains the main terms such as the property address, price and names of seller and buyer.
The sellers solicitor will draw up two copies of the contract. One will be signed by the seller and the other by the buyer. Strangely a contract is hardly ever signed by both parties and this saves the buyer and seller from having to organise a meeting as there may be long distances to travel or a long chain involved.
We may ask you to sign a contract in advance to make sure that we are prepared and we hold it in your file until both parties are ready to commit. This leads us to exchange of contracts. |
| 8 |
Contract Race |
|
When a seller decides to offer a property to more than one buyer he will say that whoever is ready to exchange first will get the property. However, the seller is quite within his rights to sell to anyone.
If you let us know that you are in a contract race then we will help your case as fast as possible. You will never unknowingly be in a contract race because the sellers solicitor is obliged to inform all parties that more than one buyer is chasing the property. |
| 9 |
Conveyancing |
|
The magic word! Conveyancing in most everyday cases can simply be described as transferring a house, flat or land from one person to another. |
| 10 |
Deposit |
|
On exchange of contracts the buyer has to pay 10% of the purchase price as way of deposit to the seller. Occasionally some buyers, especially first time buyers, do not have the full 10% deposit. If this is your case then please talk to us and we will try to reduce the deposit. The seller does not have to accept our request and can still insist on a full 10% (usually when they need it for their purchase).
If you are paying a reduced deposit then please remember that if you, as the buyer, fail to complete then the full 10% will be due immediately. Not only that but if the seller suffers further loss then you may have to compensate him.
|
| 11 |
Disbursements |
|
Payments made by us on your behalf to, for example, search providers, HM land registry, estate agents, banks amongst others. A detailed breakdown will be on your quote and completion statement. |
| 12 |
Drainage Search |
|
Also known as water search or drainage enquiry to establish whether the property is on mains drainage and a plan to show where water and drainage pipes are.
Look in beginners guide menu for a detailed description of the water and drainage search. |
| 14 |
Exchange of Contracts |
|
The moment that we as solicitors can feel that they have secured the property for our clients. It is particularly satisfying as we have completed and checked most of the critical searches, enquiries and mortgage offer and can look forward to completion day.
The buyer is now legally committed to buying the property and the seller is legally committed to selling. Neither party can pull out . The sale must be done on the day agreed in the contract and the price must be that which is on the contract. The deposit, usually 10%, will be handed over to the sellers solicitor at this point.
Up to the moment of exchange either side can pull out. You should bear in mind that you will lose money on searches, survey, fees and other disbursements. After exchange you can not pull out without losing your 10% deposit, all costs incurred and possibly damages to the other side. |
| 15 |
Fittings and Contents Form TA10 |
|
Now known as TA10 Fittings and Contents Form.This form is filled out by the seller who lists the items that are sold with the property or left behind. We usually ask our selling clients to complete this at an early stage. When we receive this form we pass it on to the buyer. This way both parties are clear as to what is included in the property price. |
| 16 |
Freehold Legal Fees |
|
Fees for the purchase of a freehold residential property. There is an additional £195+vat if the property is leasehold. We can tell when we receive title documents from the Land Registry. |
| 17 |
Gazumping/Gazzundering |
|
Gazumping is where you as the buyer put in an offer on a property which the seller has accepted but another buyer offers more money which the seller accepts instead of yours. This is common in a booming market when there is a shortage of homes on the market
Gazzundering is where the buyer turns around and offers the seller less money than was initially agreed. This usually happens when homes are difficult to sell.
Remember nothing is binding until contracts are exchanged. Buyer or seller can pull out of the deal at anytime before exchange. |
| 19 |
Indemnity Contribution Fee |
|
This is the contribution to the cost of Professional Indemnity Insurance to protect you in case of negligence on our part. |
| 22 |
Land Registry |
|
The Land Registry (HMLR) is a government office that keeps records of every property as it changes ownership. Surprisingly not all properties are registered as this process started relatively recently(1925) and to register every property in the country would be a mammoth task which would take many years. We search the land registry database for information about current ownership and whether there are any special conditions or restrictions affecting the property.
The Land Registry is also a prime mover towards electronic conveyancing for the future and their website is worth a visit for more information. |
| 23 |
Lenders fees |
|
Fees for acting for the lender. Usually when you are buying a property with a mortgage the lender will also instruct us to act for them in to make sure that all is ok with their risk and that they get good title to the property. |
| 24 |
Local Authority Search |
|
On behalf of the buyer and his lender we ask the local authority a list of questions. These cover things like Highways, Planning, Building Control, Conservation order, Compulsory Purchase. The search is in respect of the subject property only and not any adjoining or neighbouring properties. This means that if the house next door to the one you are buying is being turned into a pub or the road outside is to be made into a motorway THE LOCAL AUTHORITY SEARCH WILL NOT SHOW THIS.
We strongly recommend that you personally visit the local council departments to ask them what plans they have for the future in the immediate vicinity of your purchase
|
| 25 |
Local Search |
|
This is a high estimate. Cost varies from borough to borough. We will let you know the exact amount. It should not exceed our estimate and could be much lower. |
| 26 |
Local Search Insurance |
|
Local Search Insurance instead of a full local search. Some lenders accept this but others insist on a full search. |
| 27 |
Mining search |
|
Not necessary unless you know that your purchase is in a mining area. |
| 28 |
Money Laundering Legislation |
|
The deposit must come from your own resources and without recourse to further borrowing.
The deposit must come from a recognised UK bank or building society if you are sending an electronic transfer.
Deposits must, in all other circumstances be in the form of a banker’s draft or building society cheque drawn from a recognised UK bank or building society. Personal cheques will only be accepted at our discretion bearing in mind the standard clearing time of most UK banks.
You are advised to obtain a banker’s draft if you wish for the matter to proceed without delay.
We cannot accept cash payments at any time for more than £500 on any one transaction (NB for these purposes, a sale and purchase will constitute one transaction), and this is usually at the beginning of a transaction If cash payments are received in excess of this amount, we are required to report the matter to the National Criminal Intelligence Service (NCIS). We are not obliged to tell you that the matter has been reported, and you are advised that as a result of reporting the matter to NCIS, the transaction may be delayed with penalties being incurred by yourself. |
| 29 |
Office Copies |
|
This is the copy of the Land Registry entry showing ownership. |
| 30 |
Postage, Telephone & Fax fee |
|
Postage, Telephone & Fax fee. Please note that clients from outside the UK will be charged at extra for courier services, additional postage costs and obviously international telephone calls. |
| 31 |
Property Information Forms TA6 AND TA7 |
|
Property Information Form TA6 and Leasehold Information Form TA7. The seller has to complete these questionnaires. They cover information about the property such as boundaries, disputes with neighbours, warranties. These forms must be completed with honesty because if you fail to disclose relevant information then the buyer could take action against you. |
| 32 |
Purchase CHAPs |
|
Chaps Costs. This is the amount charged by our bank to transfer monies to other banks. £23 from our NatWest bank to other banks or £21 to another NatWest bank. |
| 33 |
Redemption of Mortgage Fees |
|
When you sell a property we MUST pay off all outstanding loans and mortgages. This is the fee for each loan we have to pay off. |
| 34 |
Remortgage |
|
A remortgage is when you switch your house loan to a different usually cheaper/better lender. |
| 35 |
SDLT land tax form |
|
Stamp duty has been replaced by the Stamp Duty Land Tax. Every person buying a property is now liable to complete a SDLT 1 form available from the Inland Revenue or your solicitor. It is the purchaser’s responsibility to complete the form and return it to the Inland Revenue within 30 days of completion. If the form is not completed to the satisfaction of the Inland Revenue or the duty not paid in time, the purchaser will be liable to a penalty from the Inland Revenue. Forms are available from the Inland Revenue on telephone number 0845 302 1472. We must receive a fully completed form from you prior to exchange of contracts.
Alternatively, you are entitled to appoint an agent to complete the form on your behalf. We are happy to act as your agent and deal with the completion of the form and deal with any subsequent inquiries raised by the Inland Revenue at cost of £75 plus VAT. Please allow for this in your budget if you wish for us to deal with the Inland revenue on your behalf at the outset of the transaction.
Please note that if you choose to deal with completion of the form yourself (or appoint an agent to act on your behalf – who will normally charge to complete the form) and any inquiries are raised by the Inland Revenue of us, we reserve the right to charge for the time spent in dealing with the Inland revenue on your behalf at a rate not exceeding £225 plus VAT.
|
| 36 |
Searches |
|
Searches are a list of questions sent to organisations to make sure that there is nothing untoward with your purchase. We must carry out the following searches, Local Authority Search, Environment Search, Drainage Search, Mining Search (only some areas) and other Land Registry Searches. |
| 37 |
SMS/Text messages |
|
This service is available to all clients free of charge. We do not charge for text alerts. Full rollout imminent. |
| 38 |
Stamp Duty |
|
Now known as Stamp Duty Land Tax is payable on conveyances and land transfers. The rates as from 22/03/2006
Up to and including £125,000, nil duty to pay.
Over £125,000 but not more than £250,000, 1%.
Over £250,000 but not more than £500,000, is 3%.
Over £500,000 is 4% . Please note that for 1 year the nil rate band has been increased to £175,000 and this will revert to £125,000 on September 2nd 2009.
|
| 39 |
Survey |
|
Your mortgage lender will normally carry out a valuation of the property you are buying. This is a basic report on the physical condition of the property to inform the lender whether the price you are paying is accurate. For an extra fee we recommend that you inform your lender to carry out a RICS Homebuyer's Report which will provide in more detail information about the condition of the property. There is also a full structural survey option available and we suggest that you look into this. Remember, your home will probably be the most expensive purchase in your life and you should consider the options above with total care. |
| 40 |
Title Deeds |
|
PLEASE NOTE THAT THIS ITEM DOES NOT EXIST ANYMORE. A FULL UPDATE WILL BE POSTED HERE SOON. Document confirming ownership of the property which is kept by the mortgage lender. If you do not have a mortgage you will be sent the deeds once you complete your purchase. The sellers solicitor has to provide an up to date Office Copy of this document to the buyers to prove that the seller actually has the right and title to sell. |
| 41 |
Transfer Deed |
|
The document that the seller signs to transfer the property to the buyer. |
| 43 |
Water auth. search |
|
Also known as a drainage search or drainage enquiry to establish whether the property is on mains drainage and a plan to show where water and drainage pipes are. We estimate the cost as it varies according to the water authority.
Look in beginners guide menu for a detailed description of the water and drainage search. |
|
