Glossary

Abstract of Title

A schedule listing the documents which set out the history of ownership of a property

Adopted Highway

A road maintained by the local authority

Advance

The original amount of the loan

Assent

A formal document required to transfer ownership of property to a person entitled to the property following the death of the owner

Assured Shorthold Tenancy

A special form of tenancy agreement designed to simplify the process of obtaining vacant possession of the property at the end of the agreed tenancy period

Attorney

Someone appointed formally to act on behalf of another either generally or for a specific purpose

Base Rate

The basic rate of interest upon which other interest rates are based

Borrower

Somebody who takes out a mortgage

Brine Search

A search to establish if a property might be affected as a result of disused workings near the property

Building Regulation Consent

Approval by the local authority on the design and materials used in building work

Buyer

Someone who buys a property

Capped Rate

A mortgage interest rate which is a variable rate but capped at a maximum upper limit usually for a limited period

Cash Back

A sum of money usually paid by cheque by the lender on completion of a mortgage

Chain

Where a property seller is also buying another property this is a chain of transactions and some chains can have many links

Charge Certificate

An official certificate issued by the land registry where a property is registered detailing the ownership mortgages and interests in the property

Commons Registration Search

A search at the local authority to check the property is not registered as common land or part of a village green resulting in third party rights over the property (e.g. grazing) resulting in the enjoyment of the property being limited

Completion

The moment when the buyer becomes the new owner of the seller’s house and the day the seller must have left the property

Completion Statement

A written calculation of all the receipts and payments due in respect of the transaction

Contaminated Land

Land affected by contamination which could arise from a past use of a property (e.g. oil refinery) or by things stored on the property in the past (e.g. petrol station)

Contract

The form of legal agreement prepared in duplicate for signature by the seller and buyer setting out all the legal rights and obligations agreed between them

Conveyance

A document transferring ownership of an unregistered property from one person to another

Conveyancing

The legal work needed to buy and sell properties

Covenants

Legal obligations set out in title deeds

Deed of Covenant

A document confirming an agreement to pay or do something

Deed of Gift

A document transferring the ownership of property from one person to another without any payment being made for it

Deed of Guarantee

A document used where one person agrees to be responsible for someone else’s debt or mortgage obligations if that person fails to carry out their own obligations

Deed of Postponement or Priority

Where a mortgagee agrees to their mortgage ranking after another lender’s mortgage

Deeds

The official documents confirming who owns a property which are in the possession of the owner or mortgagee if the property is mortgaged

Deposit

The agreed amount to be paid on exchange of contracts usually forfeited if the buyer fails to complete

Disbursements

Payments made on your behalf e.g. search fees

Discount Rate

A mortgage interest rate which will rise and fall with the variable rate but which will always be the discounted amount below the variable rate

Endowment Mortgage

A mortgage where you pay the interest on the mortgage only and a premium towards an endowment policy. The policy is then intended to pay off the original amount borrowed at the end of the mortgage term

Endowment Policy

Assurance providing for the payment of a lump sum on death or maturity

Environmental Search

A search against a property to check whether there is any record kept to suggest that the property may be affected by contamination

Equity

Usually means the difference between the value of a property and the amount owed to the mortgagee

Exchange of Contracts

The formal exchanging of the two parts of the contract when the seller and buyer become legally bound to complete on an agreed date and in the case of the seller, to move out of the property

Expedition Fee

An additional fee which can be paid to the land registry to speed up registration

Fixed Rate Mortgage

A mortgage interest rate where the mortgagee agrees to charge a fixed rate of interest over a given period whether or not the variable rate changes

Fixtures Fittings & Contents Form

A standard form where the seller sets out all those items in the property which they have agreed to leave as part of the sale price and which is attached to the contract

Flying Freehold

This arises when part of one property is built on top of part of another property and so the upper property owner does not own the building or land underneath the “flying” part

Freehold

Absolute title

Freeholder

This means the landlord who owns the land and is entitled to the ground rent under the lease and possession of the property at the end of the lease term

Full Title Guarantee

The seller of a property must state the guarantee they are prepared to give. This is the usual guarantee given by a property owner

Further Advance

An additional amount lent to the mortgagor under the terms of the original mortgage

Ground Rent

This is paid by a lessee to a lessor where a property is leasehold and is usually expressed as a yearly sum

High Loan to Value Fee

This is sometimes charged by a mortgagee where a borrower borrows more than a certain percentage of the value of a property to insure the mortgagee only against loss arising if the property is sold by them due to the borrower’s failure to pay the mortgage

Indemnity Policy

Often in the course of a transaction issues arise about, for example, restrictive covenants registered against a property preventing alterations and extensions where the property has been altered/extended, or problems relating to the lack of building regulations/planning permission for alterations/extensions. In a vast majority of cases these problems can be resolved by taking out an indemnity insurance policy, which cost typically between £75.00 and £300.00 depending on the circumstances and price of the property.

Index Map Search

A search at the land registry to see if a property is registered or unregistered

Interest Only Mortgage

A mortgage whereby interest only is paid to the mortgagee and the capital amount of the original loan is repaid at the end of the mortgage term either by an endowment policy maturing or a pension or other savings plan maturing

Land Certificate

An official certificate issued by the land registry where a property is registered detailing the ownership and interests in the property where there is no legal charge

Land Charges Search

A search at the land charges registry to see if a person has any bankruptcy proceedings pending or if the property is unregistered to see if there are any mortgages or interests registered against the property

Land Registry

A government organisation maintaining a register of properties and their ownership in England and Wales

Land Registry Fee

The fee payable to the Land Registry to register any change affecting the property including a change of ownership

Land Registry Search

A search at the land registry to check that no undisclosed charges or interests are registered against the property

Lease

Where a property is leasehold this is the document giving the lessee the rights to possession of the property for the lease term and setting out all the rights and obligations

Leasehold

Where the ownership of property is for a limited period only. For example 99 years or sometimes 2000 years. Possession of the property will be subject to the payment of an annual ground rent

Leaseholder

Where a property is leasehold the Leaseholder means the current owner of the leasehold property as opposed to the freeholder or landlord who’s interest is subject to the Leaseholders right of occupation until the lease term has come to an end

Legal Charge

Also know as mortgage or loan to buy a house or flat where the mortgagee lends the mortgagor money in return for a legal charge being registered against the property to ensure that the loan must be repaid before the property can be sold

Lender

Somebody who gives someone a mortgage (e.g. a bank or building society)

Lessee

Where a property is leasehold the lessee means the current owner of the leasehold property as opposed to the freeholder or landlord who’s interest is subject to the lessees right of occupation until the lease term has come to an end

Lessor

This means the landlord or freeholder who owns the freehold title and is entitled to the ground rent under the lease and possession of the property at the end of the lease term

Limited Title Guarantee

This is the title guarantee given by a seller where because of their limited knowledge of the property the full title guarantee cannot be given (e.g. a personal representative of a deceased owner or a mortgagee in possession)

Local Search

A search carried out at the local authority to check whether there have been any notices registered affecting the use of the property or any proposals for the neighbourhood which may directly affect the property

Mining Search

A search to check whether the property may be affected by coal mining activity which may result in subsidence

Mortgage

A loan to buy a house or flat where the mortgagee lends the mortgagor money in return for a legal charge being registered against the property to ensure that the loan must be repaid before the property can be sold

Mortgage Deed

The document signed by the mortgagor to create a legal charge which the mortgagee can register at the land registry

Mortgage Offer

The details of the terms upon which the mortgagee is prepared to make the mortgage loan

Mortgage Term

The length of time agreed for the repayment of the loan

Mortgaged

Where a property has been charged by the owner or mortgagor to the mortgagee

Mortgagee

Somebody who gives someone a mortgage (e.g. a bank or building society)

Mortgagor

Somebody who takes out a mortgage (a borrower)

Occupier’s Consent

Any person who lives at the property but will not be signing the mortgage deed will be asked to consent to the mortgage being taken out and agree to move out if the mortgagee takes possession due to the default of the mortgagor

Party Wall

A wall owned jointly with a neighbour and repairable at shared expense

Planning Permission

Approval by the local authority to the building or change of use of a property or extension to an existing property

Power of Attorney

The document to be signed by somebody to appoint somebody else to act as their attorney

Private Road

A road maintained by property owners rather than by the local authority. The property owners need to have rights over it as it is not necessarily a public access

Property Information Form

A document completed by a seller to give information about the property to the buyer (e.g. who maintains boundaries and whether there have been any disputes)

Purchase

The buying of a property

Radon Gas

A naturally occurring radioactive gas which may if above certain safety levels require preventative action to be taken (e.g. more ventilation in a property

Redemption

The repayment of an existing mortgage

Redemption Penalty

A penalty charged by a mortgagee when you redeem a mortgage within a fixed rate, discounted rate or cashback period

Registered Land

Property which has already been registered at the Land Registry

Remortgage

Changing a mortgage from one mortgagee to another

Rentcharge

Some freehold properties are subject to a rentcharge payable to the rentcharge owner. This may be to ensure income for the original land owner without the existence of a lease or it can be to ensure that estate covenants can be enforced more easily

Repayment Mortgage

A mortgage where the mortgagor repays both interest and some of the initial capital borrowed each month

Reservation Fee

An administration fee charged by some mortgagees to cover the cost of reserving a mortgagor’s entitlement to a loan on certain terms or possibly a fee paid to a builder to reserve a particular new property

Sale

The sale of a property

Seller

Someone who sells a property

Service Charge

A payment required by a lessor or managing agent to cover the costs of maintaining and running a development (e.g. gardening and decorating and also insuring a block of flats)

Smoke Control Order

An order made by the local authority designating an area to be one in which only smokeless fuels may be burnt (i.e. not coal or wood)

Stamp Duty Land Tax

A tax paid to the government on transactions involving property over a certain value

Subsidence

Where a property moves due to inadequate foundations or severe change to the underlying ground resulting in an instability in the structure of a building often evidenced by cracks in walls

Survey

An inspection and report on the property by a surveyor as to the state of the property and value

Term Assurance

Life insurance which only lasts the term of the mortgage

Tin Search

A search to establish whether the property may be affected by tin mining activity which may result in subsidence

Title

The owner’s right to a property

Transaction

A dealing with property (e.g. sale or purchase)

Transfer

A document which transfers ownership of a property from one person to another

Transfer of Equity

A document transferring ownership of a share or interest in a property from one person to another

Tree Preservation Order

An order made by the local authority designating a tree or group of trees as protected and requiring the local authority’s permission to lop or fell them

Unregistered Title

Where the title to a property has not previously been registered at the Land Registry and ownership is proved by the production of a complete chain of documents showing successive ownership

Vacant Possession

Possession of a property free of the presence of any people, possessions or rubbish

Valuation

A very simple form of survey designed to establish the market value of the property

Variable Rate

A mortgage interest rate which is variable and which is set by each individual mortgagee.

Wayleave Agreement

A formal agreement entered into with a property owner to give a service provider (e.g. Electricity or Telephone company) a right for their pipe or cable to pass through or over their property