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Deeds/Title
Deeds - These are the legal
documents that contain information about the Property.
Defective Title
Insurance - A defective title
means that there is a problem with the deeds relating to the property. They may
be missing, destroyed, lost or simply inadequate. A buyer will not usually buy a
property with a defective title unless the seller provides him with an insurance
policy to protect him and his lender against any financial loss which could
result from the defective title.
Deposit -
There are two types of deposit that a purchaser may be asked to produce.
Sometimes the estate agent will ask for a goodwill deposit to secure the
property. You should not pay this deposit without first consulting with your conveyancer. The second type of deposit is the one a Purchaser will pay to the
conveyancer to hand over with the Contract. Traditionally this was 10% of the
purchase price but often less than this is accepted.
Disbursements -
Simply put this means items that the conveyancer must pay to other persons on
your behalf. Typically these are VAT, Stamp Duty, Land Registry Fees and
searches.
Drainage/Water
Search - This is a search carried
out by the conveyancer for the purchaser to check whether the property is
connected to mains water and drainage and whether there are any other issues
relating to drainage/water affecting the property.
Easement -
This term means a right given to the property owner over adjoining property or
land. Typically this could be a right of way or access, a right of drainage or a
right to a water supply. By law the Seller must disclose all latent easements
but not patent easements. Latent easements are easements that could not be
discovered by search or survey in other words they are not easily found out.
Patent easements are easements that can be discovered by search or survey.
Environmental Search
- This is a search that the
conveyancer carries out to check whether there are any environmental issues
affecting a property. These may include matters such as flooding, coal mining
and land fill.
Equity -
The equity in a property is the value that is left after you take the current
worth of the property and deduct from that any mortgages outstanding on the
property.
Estate Agent -The
Estate Agent acts on behalf of the seller to sell the property. They will
prepare a set of details which must be accurate by law. They will negotiate the
sale between the buyer and seller and any specific terms. The Estate Agent will
prepare a Memorandum of Sale giving details of the buyer, the seller, their
conveyancers, the price and any specific terms which is sent to all parties to
the transaction.
Exchange of
Contracts - The buyer's
conveyancer and the seller's conveyancer "Exchange Contracts" on the telephone.
If there is a chain the solicitors for everybody in the whole chain "exchanges
contracts" at the same time using a Law Society formula. Once contracts are
exchanged the sale/purchase is legally binding.
Financial Advisor -
The Financial Advisor is usually responsible for arranging the mortgage or
finance to purchase the property and will often arrange any life insurance,
mortgage protection insurance etc.
Fixtures and
Fittings List - This is a list of
items that will remain/be taken from the Property. This is completed by the
Seller and a copy is attached to each part of the contract and is legally
binding.
Freehold -
This is the legal term for the way that an owner holds the property. The other
terms are leasehold and commonhold. With freehold land the owner owns the
property/land outright subject only to any mortgages, charges, easements,
covenants etc. shown by the deeds.
Gazumping -
This is where the seller sells to another buyer for a higher price. This can
only happen before exchange of contracts.
Gazundering -
This is where the Buyer lowers his offer on the property after agreeing a price.
This can only happen before exchange of contracts.
Ground Rent -
This is the rent paid to the Landlord usually on a Leasehold property where
there is a long lease. Ground Rents are payable on some freeholds.
Indemnity Insurance
- The Law Society and the CLC
(see above) insist that all Solicitors and all Licensed Conveyancer firms must
take out insurance to the value of £1,000,000 or more to cover defective work or
fraud by that firm of its client (s).
Inland Revenue -
A government department that collects tax on behalf of the government. The
Inland Revenue now insists by law that every purchaser of property must complete
a Stamp Duty Land Transaction Form. This form must be sent to Inland Revenue
along with any Stamp Duty within 30 days of completion. The Inland Revenue
impose hefty fines if this is not done. For sample forms and Stamp Duty Tariffs
see our links page for details of Inland Revenue web site.
Instructions -
This means authorisation by the client to the conveyancer. The client must give
the conveyancer written instructions to act on his behalf in the property sale,
purchase, re mortgage or transfer. After that the conveyancer will from time to
time ask the client for instructions as to how the client wishes to proceed. For
instance what date the client wants to move on.
Joint Tenants -
Where two or more persons buy a property they are called joint tenants or
tenants in common whether the property is freehold, commonhold or leasehold.
Where property is held as a joint tenancy if one owner dies the property passes
to the other owner automatically without a Will. If the property is held as
Tenants in Common each buyer owns their own share of the property which can only
be passed on by sale or by a Will.
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