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"Conveyancing" is the legal process used when buying or selling a flat or house, transferring your property (usually on divorce, separation or death) and changing or arranging a new mortgage.
When you BUY a house or a flat (or arrange a new mortgage) your solicitor will:
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|Contract||A legally binding document made between a buyer and seller – once exchange of contracts has taken place the buyer is legally bound to buy the property and the seller is legally bound to sell the property to the buyer.|
|Completion||This is usually the moving date but it is the date that the buyer pays for the property and becomes the new owner.|
|Completion money||The difference between the purchase price, less any costs, mortgage advance and any deposit paid by you.|
|Completion Statement||A statement showing the amount of money required from/due to you on completion, taking in to account the costs involved in the transaction.|
|Covenants||Legal obligations which restrict uses of land so that the value and enjoyment of adjoining/surrounding land is preserved, for example an obligation not to carry on trade or business or not to do anything which will be a nuisance or annoyance to neighbours.|
|Declaration of Trust||An agreement made between joint owners of a property as to who owns which share - usually this set out how much was paid by each party when the property was purchased, how much each party will receive when the property is sold and how any equity in the property will be split.|
|Deeds||A set of legal papers required for a property which is not registered at the Land Registry, showing the transfer of the property to the legal owner – this often includes other documents containing rights and obligations. They are usually very old!|
|Deposit||An amount payable by buyer to seller on exchange of contracts to secure the property – usually between 5 and 10% of the purchase price. If the buyer fails to complete the deposit will usually be paid to the seller with interest as a penalty.|
|Easement||A right benefiting land - most properties need rights for access, drainage, supply of water, gas, electricity and communications. Some properties need additional rights.|
|Enquiries||Enquiries raised by the buyer’s solicitor relating to legal or practical issues revealed by the paperwork supplied by the seller’s solicitor.|
|Exchange of Contracts||
This part of the process is where the agreement becomes legally binding and usually involves a telephone conversation between the buyer and seller’s lawyer.
When contracts are exchanged the completion date is agreed and cannot be changed without agreement by both parties. After exchange of contracts neither party can withdraw without penalty.
|Freehold||Absolute ownership of land and buildings on land.|
|Ground Rent||A regular payment made by a tenant to a landlord for a property held under a lease.|
|Indemnity Policy||A legal insurance policy put in place to cover a defect, for example the absence of planning or building regulations consent for alterations carried out at a property.|
|Joint Tenants||This is one of two ways in which two or more people may own a property - each owner owns the whole of the property - of one owners passes the remaining owners receive the whole of the property. Your interest in a property held as joint tenants cannot be passed to anyone specifically named in your Will.|
|Landlord||The owner of the freehold for a development made up of flats. This can be a private individual, the tenants of the building, a company or a residents association.|
|Land Registry||Central register for land in England and Wales - this is an enormous database which stores information about land ownership, rights which benefit land and rights and obligations affecting land.|
|Lease||An agreement (between landlord and tenant) allowing one person to live in a property for a specified period of time (usually 99 to 999 years) in exchange for a rent.|
|Leasehold||A tenant’s interest in a property held under a lease.|
|Managing Agents||Managing Agents are usually appointed by a Landlord to manage a leasehold development, including arranging insurance, collecting service charges and ground rent and arranging repairs.|
|Mortgage||A loan from (usually) a lending institution, such as Halifax, Nationwide or HSBC, which is secured against the property on completion.|
|Mortgage Advance||The amount your lender sends to the buyer’s solicitor to complete your purchase.|
|Mortgage Deed||A legal agreement made between you and your lender for a Mortgage. It contains your agreement to comply with conditions and repay the loan in accordance with the offer made to you.|
|Mortgage Redemption||The amount required to repay a mortgage when a property is sold.|
|Mortgage Valuation||A valuation carried out for the benefit of your lender for the purposes of ensuring that the property is sufficient security for your mortgage. This is NOT a survey|
|Occupiers Waiver||If you are buying a property with a mortgage you must tell your lender if anyone else over 17 is going to live at the property with you. By living at the property the occupier may, over time, acquire rights over the property which could have priority over the mortgage. By signing an Occupiers Waiver the occupier agrees not to enforce their rights against the lender.|
|Sale proceeds||The amount due to you when you complete your sale of the property, having deducted any mortgage repayment, estate agents and legal fees.|
Searches are enquiries made on a buyer’s behalf with usually:
1. The local authority – to ascertain a number of issues including whether the property is listed, in a conservation area, affected by a Tree Preservation Order, the planning and building regulations history for the property and the road adoption status.
2. The Water authority – to ascertain whether the property is connected to mains drainage and water, the location of the closest public water pipes and drains and whether any public water pipes and drains lie under the property.
3. Environmental Experts – to ascertain whether there are any environmental factors which would have a negative impact on the value of the property.
4. The Highways Authority – to ensure the road and pathways connect directly to the Property.
|Service Media||Pipes, wires and cables which carry water, gas, electricity and communications to a property or sewerage from a property.|
|Service Charge||Charges payable under a lease to the Landlord to cover the Landlord's cost in carrying out maintenance and repairs to the building in which the property stands, the land, its boundaries, services and insurance.|
|Stamp Duty Land Tax||A tax you pay for the privilege of buying a property! Please see above for more information.|
A detailed inspection of a property with the provision of a comprehensive report detailing the condition of the property, anything which may affect its value, any urgent repairs or works
required and an estimated valuation based on local knowledge and findings.
|Tenant||The owner of a leasehold property (usually a flat).|
|Tenants In Common||This is the second form of joint ownership - each owner owns a share of the property itself. The share is usually set out in a Declaration of Trust. When one owner dies, their share in the property will pass to the beneficiary named in their Will.|
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