Legal Jargon Buster – Conveyancing Terminology

Solicitors are often accused of using overly complex legal language. Whilst we try not to when dealing with clients, there are some words and phrases that are so entrenched in the conveyancing process they are hard to avoid. In this blog, we will try to explain some of these.

Apportionments: If the property is leasehold, the property will mostly likely be subject to a service charge and ground rent. As such, the amount paid for each up until completion will need to be calculated to ensure the seller pays to the day before completion and the buyer pays from completion to the end of the relevant payment period. These calculations are called the apportionments.

Bill/Completion Statement: When we are close to completion, we will prepare our bill and completion statement. The bill will include our legal fees and any disbursements incurred on the client’s behalf in relation to the transaction. The completion statement will outline either the funds due to or from the client dependent if you are buying or selling. A sale statement can include redemption funds to a lender and estate agent fees. A purchase statement can include mortgage advance received from lender.

Chain: When there is more than two transactions dependent on each other, this creates a chain. The chain will begin with someone who is just buying and finishing with someone who is just selling, and the chain length varies dependent on the number of transactions between these points.

Client Instruction: We establish with our clients the nature of the transaction they require us to deal with. We also get an understanding as to whether there are any transactions dependent on each other, such as a sale and purchase.

Completion: Completion is when the purchase price as paid by the buyer’s solicitor to the seller’s solicitor after exchange of contracts. Keys are then released by the seller’s solicitor and the buyer can collect keys from the estate agent.

Contract Documentation: This is the documentation which the seller’s solicitor provides to the buyer’s solicitor about the property being purchased. The documents which are provided are the contract, title documentation, and the Law Society’s protocol forms which are completed by the seller. These are the Property Information Form, Fittings and Contents Form and Leasehold Information Form (only applicable is the property is leasehold).

Executors: An individual who has been named in the property owner’s Will as the person responsible for administering their estate after they have passed away.

Exchange of Contracts: Once all due diligence has been satisfied between the buyer’s and the seller’s solicitors, and we hold signed documents along with the deposit monies, we will then be in a position to exchange contracts. Exchange of contracts is when the transaction becomes legally binding on both parties, setting the day of which completion will take place.

Freehold: A property which is freehold gives the owner complete ownership of the property and all the land which is outlined by the boundaries in the title. This is referred to as ‘title absolute’ on the title register. However, a property can alternatively have ‘possessory title’, which is usually granted when an owner is unable to provide documentary evidence of their title to the land. Both ‘title absolute’ and ‘possessory title’ can also be referred to in a leasehold title.

Land Transaction Return: This is a tax return relating to Stamp Duty Land Tax which outlines the stamp duty payable on a purchase. We complete the return online and provide this to the buyer to review and sign. Once completion has taken place we will make payment of the Stamp Duty to HMRC on behalf of the buyer.

Leasehold: A property which is leasehold limits ownership to a set number of years which is outlined on the Lease. The shorter the lease, the less value the property has and it can cause issues with getting a mortgage. Leasehold properties can be flats and houses. If the freeholder’s title was not proven when a leasehold property is registered at Land Registry for the first time, it will have ‘good leasehold title’.

Management Pack: This is the documentation usually received from Management Company that looks after the general running of the estate or building in which a leasehold property is located, which is provided to the buyer’s solicitor by the seller’s solicitor. The documentation will include all necessary information about the property and communal areas, such as service charge and ground rent. It will also include any required post completion requirements which may involve a certificate of compliance required when the buyer’s solicitor comes to register to the property at Land Registry.

Mortgage Offer: Once a mortgage has been accepted and produced by the lender, as the buyer’s solicitor we will receive our own copy of the buyer’s mortgage offer in which will also include the mortgage deed for the buyer to sign and the certificate of title, which we use to request funds from the lender. Offers will be delivered to us via post or an online portal, dependent on the lender.

Mortgage Redemption: If we are acting for the seller and their property is subject to a mortgage, we will be required to obtain a redemption statement from the lender for the day of completion so we can pay off the mortgage on the seller’s behalf.

Power of Attorney: An individual selling a property may sell with Power of Attorney, this means the property owner has legally appointed one or more people to act on their behalf.

Registration at Land Registry: The transfer which is signed by the seller will be sent to the buyer’s solicitor following completion so they can register the property at Land Registry. This will update the title register to change the registered proprietors’ names into the buyer’ names. The registration application will also include the mortgage deed, which will be added as a charge to the title register. When the property is not registered, the buyer’s solicitor will complete a First Registration using the Epitome of Title provided by the seller’s solicitor.

Searches: If we are acting for the buyer, we will advise the buyer about obtaining searches. If they are getting a mortgage this will be necessary; however, if the buyer is a cash buyer, they will have the choice as to whether they want searches. We usually obtain a Local Search, Drainage & Water Search, and Environmental Search, plus a Coal Search dependent on the area where the property is being purchased.

Title Documentation: This is the documentation that proves who owns a property. If the property is registered at Land Registry this takes the form of office copies of the register which outlines important information about the property, such as who the property owners are, whether the property is subject to a mortgage, whether the property is affected by any rights of way or restrictive covenants and any other legal matters the Land Registry have deemed relevant. If the property is not registered at the Land Registry, the seller should hold paper deeds which contain this information and the seller’s solicitor should provide an overview of these called an Epitome of Title to the buyer’s solicitor who will use these deeds to register the property at the Land Registry.

If you are looking to buy or sell a property, we hope this glossary of terms is useful in understanding the various parts of the conveyancing process. Alongside this, you can instruct one of our property team to complete the conveyancing work and we will ensure you are kept informed throughout. Our aim is to avoid speaking in legal jargon, keeping things straightforward. To speak to one of our specialists about your requirements, please call 0845 287 0939, contact us by email, or use our online quote generator below.