Glossary of Terms

Agreement or Contract: This is the form of legal agreement which makes the transaction legally binding. A draft contract is prepared by the seller’s conveyancer and sent to the buyer’s conveyancer to be approved. When the draft is approved, one copy is signed by the seller and one copy is signed by the buyer.
Bank Chaps Transfer: A CHAPS transfer is an electronic transfer of money from one bank to another. It transfers the money almost immediately (although a bank will only guarantee it to arrive by close of business on the day it is sent), and thus there is no clearance time, as there would be with a cheque or banker’s draft. This is the usual way of moving money on completion. Banks usually make a charge for this service. An alternative method is BACS, which can take up to three working days (this is the method usually used by internet and telephone banking). There is usually no fee payable for this service.
Completion or Completion Date: This is the moving day. The buyer’s conveyancer pays over the money to the seller’s conveyancer, and in exchange receives the Transfer Deed and any other deeds relating to the property. The keys are handed over at this point, usually via the estate agent. The seller moves out and the buyer moves in.
Conveyance or Transfer Deed: These terms refer to similar documents. A Conveyance was the document which transferred ownership of a property in the days before it was compulsory to register titles with the Land Registry following a change of ownership. A Transfer Deed is the document commonly used now to transfer ownership of land, and it usually takes the form prescribed by the Land Registry.
Conveyancer: This is the term used for a conveyancer, licensed conveyancer, solicitor, legal executive or any other legal representative acting for a seller or a buyer.
Disbursements: These are out-of-pocket expenses that we have to pay to a third party on behalf of a client; examples are the fee for a Local Search, or the Land Registry fees.
Exchange of Contracts: The two signed contracts are exchanged (usually by a special telephone procedure). It is this exchange of contracts which creates a legally binding agreement. One of the terms of the contract is the completion date.
Freehold, Leasehold & Commonhold: These are the three types of ownership possible under English law. Freehold is the fullest type of ownership, and lasts for ever. It is the usual type of ownership for land, houses and bungalows, but not flats or apartments (although it is possible to have a freehold flat, or a flat which shares the freehold with other flat owners in the block). Leasehold is ownership limited to a specified period of time, for instance 999 years in the case of a long leasehold, or one year in the case of a short tenancy. Leasehold usually involves payment of a rent; this might be £25 per year in the case of a long leasehold, or an open market rent in the case of a short tenancy. The terms setting out the relationship between the landlord and tenant are contained in a lease (long leasehold) or a tenancy agreement (short tenancy). Commonhold is the newest type of land ownership – there are not many commonhold estates in the country as yet. It was created for new developments where there are common areas used by all of the properties on the estate; it saves the necessity of having separate management companies to deal with the running of these areas. We can give you more detailed information if the property you are buying or selling is commonhold.
Mortgage or Legal Charge: A mortgage or legal charge is a document which makes a property the security for a loan. This usually (but not always) involves monthly financial repayments.
Purchaser and Vendor: These are slightly old-fashioned terms for buyer and seller respectively.
Registered Land: Gradually all title deeds are being replaced by a process of registration of properties at the Land Registry. An owner of a property is supplied with a Title Information Document containing an up-to-date copy of the register for their property. These documents replace the old title deeds (although any old deeds should be retained, as they are often useful when the property is being sold). Fees are charged by the Land Registry for registering change of ownership and carrying out searches.
Stamp Duty Land Tax: This is a tax payable by the buyer, and is commonly known as SDLT. There are four rates of SDLT payable: 0% of the purchase price if this is £175,000 or less (up to 31 December 2009, after which it reverts to £125,000); 1% of the purchase price if this falls between £175,001 and £250,000 (or between £125,001 and £250,000 after 31 December 2009); 3% of the purchase price if this is between £250,001 and £500,000; and 4% of the purchase price if this exceeds £500,001. SDLT must be paid within 28 days of completion, otherwise a fixed penalty is charged by H M Revenue & Customs. If payment is delayed beyond this period a further penalty is charged. Interest is also payable on the penalties. It is the buyer’s responsibility to ensure that payment is made, although we will deal with this on your behalf.
Survey: This is an inspection of the structure of the property by a qualified surveyor. Please see the FAQs for further information.
Title: This means details of the ownership of a property. If the property is registered then the Seller’s conveyancer will produce an up to date copy of the Land Registry’s register. If the property is unregistered then the Seller’s conveyancer will provide copies of relevant title deeds to prove that the Seller is entitled to sell the property in question.