Understanding Your Conveyancing Solicitor

Property conveyancing can feel quite complicated and daunting, especially if it’s your first home purchase. That’s why, here at Holdens Law in Lancaster and Kendal, we do everything we can to make things as simple and straightforward as possible.

Your conveyancing solicitor will explain everything, step by step. They will make sure you always know where you are up to in the process, and what remains to be done in order to complete the sale and get you moving to your new home.

There’s a lot of legal jargon when it comes to buying or selling a home. So to help you understand your conveyancing solicitor better, here’s a quick explanation of some of the key terms they might use:

Boundaries – the official limits to a property. These are normally shown on the property deeds.

Caveat Emptor – a Latin phrase which means ‘buyer beware’. It reminds you that as the buyer, it’s your responsibility to assess the condition of the property. The seller is under no obligation to point out faults or problems, so the buyer needs to be thorough.

Chain – a chain is the connection between several properties that are being bought or sold. A break in the chain can stall several moves at once.

Chain free – a chain free property is one where the sale is not conditional on a successful onward purchase. This is normally an empty property or a brand new home.

Completion date – as the name suggests, this is the day when all the legal work is completed and you can move in. The ownership of the property formally transfers on completion day.

Completion statement – this is the financial summary we’ll give you showing the transaction details and how much, if any, money will be returned to you. (see equity)

Conditions of sale – this is the detailed terms of the deal between the buyer and the seller.

Contract – this is the formal agreement between buyer and seller, which includes all the conditions of sale. Contracts are signed by both sides and exchanged ahead of completion. This normally happens a week or two before completion day, although exchange and completion can happen on the same day.

Conveyancing solicitor – certain legal steps in a home sale or purchase can only be carried out by a trained and qualified legal professional such as a conveyancing solicitor, licenced conveyancer or legal executive.

Covenants – these are often historic rules or restrictions that apply to the use or maintenance of a property. These may apply to things like boundaries, trees or non-residential uses.

Deeds – the deeds are the official ownership documents for a property. They used to be formal paper documents, but in recent times the registration of property has increasingly moved online making physical title deeds for some properties redundant.

Defective Title Insurance – if your seller does not have their deeds, and the property is not registered with the HM Land Registry, you can ask for an insurance policy to potentially cover any financial losses if there are any future problems with the ownership.

Deposit – this is an amount of money, usually 10% of the purchase price, which is handed over when contracts are exchanged. If you are buying and selling, your purchase deposit is often covered, or mostly covered, by your buyers’ deposit. If you pull out after exchange, you can lose this deposit. (see exchange of contracts)

Disbursements – this is the term used for the additional costs paid out by your conveyancing solicitor. These will be charged in addition to the agreed fees. Disbursements include the cost of things like searches and registration fees. (see searches)

Easement – an easement is a formal agreement that gives neighbours the right to cross your property or allows services such as drains to cross your property.

Energy Performance Certificate (EPC) – this is the compulsory assessment of a home’s energy efficiency. It covers things like heating, hot water and insulation. EPCs are graded A to G, with the average UK property rated D. You must have an EPC to sell your home. They typically cost around £100. This is usually arranged by the seller and not their conveyancing solicitor.

Environmental Search – as the name suggests, this is a search to see if there are any environmental issues affecting a property. It covers things like flood risk, mining and Radon gas.

Equity – this is the amount of money you have left from your property sale once your mortgage has been paid off. The amount of equity will be detailed in your completion statement. Negative equity means the proceeds of your sale will not cover the outstanding mortgage.

Exchange of contracts – this is the point at which the sale of the property becomes legally binding. Contracts are exchanged and a deposit is paid. If you pull out after exchange of contracts, you will lose your deposit and you could even be sued for breach of contract. (see contracts)

Fixtures and fittings – this is the official list of what you will be leaving behind as part of the sale. You cannot take anything with you that is on this list.

Freehold – freehold means you own the property, and the land included within its boundaries, outright and forever. A lot of homes in England and Wales are freehold.

Indemnity insurance – indemnity Insurance can be taken out to offer cover against financial loss in respect of a number of issues. For example, if the seller is unable to provide building regulation compliance certificate for key elements of the home, such as central heating boilers, replacement windows or building work, they may offer indemnity insurance. Indemnity insurance does not guarantee the works are safe but does offer cover against any financial loss occurred as a result of enforcement action being taken. However, there’s no guarantee any claims made under the policies will be successful.

Leasehold – flats and apartments are often leasehold. This means that the building and surrounding land is owned by someone else (the Landlord or Freeholder) and ‘rented’ by the new resident (the Leaseholder). You do not own the property outright, but you do own the right to live there for the duration of the lease – usually 99 years or longer. Leasehold payments are often negligible, so called ‘peppercorn rents’, but they can also be a significant financial consideration.

Listed Buildings – if your property is a listed building, there will be rules about what repairs and renovations you can make, and exactly how this work is carried out. Listed building status can add thousands of pounds to even simple jobs.

Local Search – as the name suggests, this is a search to find information about the property and the local area. The Council provide this information. This search may reveal any financial land charges affecting the property, the existence of planning permissions and building regulations in respect of works carried out and also Council schemes in the area which may affect your use of the property. 

Mortgage Deed – this is the formal document you need to sign to accept the terms of your mortgage. You’ll be asked to sign the mortgage deed ahead of completion but the signing of the deed is not binding until the day of completion when the mortgage deed is dated and the mortgage starts.

Searches – one of the most important roles of a conveyancing solicitor is to make sure that there are no issues or potential problems with your home. To assist them in checking this, they will order a series of searches, for example:

• Local Authority search
• Drainage and Water search
• Environmental search
• Mining search

Stamp Duty – Stamp Duty Land Tax (SDLT) is a tax levied by the Government on property transactions over a certain price. It is paid by the buyer. The thresholds change from time to time and first-time buyers often have a higher threshold before SDLT is due on their purchase.

Subject to Contract – if your home is sold ‘subject to contract’ this means that the sale is not legally binding. It remains subject to contracts being agreed, signed and exchanged. You can pull out of a sale at this stage without penalty.

Survey – a survey is an inspection of a property by a trained surveyor. It’s often a condition of a mortgage, however it’s usually wise to get a survey even if you’re a cash buyer. There are three levels of survey: Level 1 Condition Survey (which only covers the basics), Level 2 Homebuyer Survey (a more detailed assessment), Level 3 Full Structural Survey (which is a details and thorough assessment. In many cases, a Level 2 survey is the most appropriate.

Telegraphic Transfer Fee – this is the fee that the bank charges to transfer the funds when you buy or sell a home.

 

“We hope that this ‘conveyancing jargon buster’ has helped to demystify the world of buying or selling a home,” says Natalie Bradley from Holdens Law’s conveyancing team. “Remember, if you have any other questions, you can always contact the conveyancing solicitors at Holdens Law, in Lancaster or Kendal, and myself or my colleagues will be happy to help”.