legal terms
Abstract of Title: A schedule listing the documents which set out the ownership history of a property.
Adopted Highway: A road that's maintenance is the responsibility of the local authority.
Advance: The original amount of the loan.
Adverse Possesion: In common law, adverse possession is the process by which title to another's real property is acquired without compensation by holding the property in a manner that conflicts with the true owner's rights for a specified period of time.
Assured Shorthold Tenancy: A form of tenancy agreement that simplifies the process of assuring vacated possession at the end of a tenancy agreement.
Attorney: A person appointed to act on behalf of another generally or in a specific circumstance.
Base Rate: The basic rate of interest upon which others are based.
Borrower: See mortgagor
Brines Search: A search to establish if the property may be affected by workings near by.
Capped Rate: A variable interest mortgage that is capped at a maximum upper limit usually for a limited period.
Cashback: An amount of money that is paid by cheque by the lender on completion of the mortgage.
Chain: When a property seller is buying another property this becomes a chain of transactions that can be many links long.
Charge Certificate: An official document, issued by the Land Registry, detailing the ownership mortgages and interests in the property.
Commons Registration Search: A check with the local authority to ensure that the property is not registered as common land or part of a village green resulting in third person rights over the land.
Completion: The day when the seller must have vacated the property and the buyer becomes the new owner.
Completion statement: A calculation of all the receipts and payments due with respect to the transaction.
Contract: A legally binding agreement signed by both parties in a transaction.
Conveyance: A document transferring ownership of unregistered property from one party to another.
Covenants: Legal obligations and conditions that can be personal (and are binding on the covenator), attached to the land/lease (and are binding on the current owner,) or both.
Deed of Covenant: A legal document agreeing to the adherence of any covenants.
Deed of Gift: A document for the transfer of a property without a payment being made.
Deed of Guarantee: A document that binds someone to be responsible for another person’s debts or mortgage obligations if that person fails to carry out their own obligations.
Deed of Postponement or Priority: When a lender agrees to their mortgage ranking after that of another lender’s.
Deeds: Official documents confirming who owns a property. These should be in the possession of the owner or the mortgagee if there is a mortgage.
Deposit: The agreed amount to be paid on exchange of contracts which will be lost if the buyer fails to complete. The deposit is usually held by one party’s solicitor on the terms that it cannot be released to anybody other than another solicitor acting in a chain until completion.
Disbursements: Payments made on behalf of the buyer.
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 off the interest plus an amount towards an endowment which is designed to pay off the original loan amount at the end of the policy.
Environmental Search: A search against the property to see if it may be affected by any environmental contamination.
Equity: The current market value of a home minus the outstanding mortgage balance and any loans secured against a property.
Exchange of Contacts: The formal exchange of contracts that legally binds both the seller and the buyer to complete on the agreed date with the seller vacating the property.
Expedition Fee: An additional fee payable to the land registry to speed up the process of registration.
Fixed Rate Mortgage: An interest rate agreed to by the lender that will remain constant regardless of variable rate changes.
Fixtures and Fittings and Consent Form: A document in which the seller lays out what is left as part of the price of the property.
Flying Freehold: When part of a property is built on top of another this freehold states that the owner of the flying freehold does not own the building or land underneath.
Freehold: The perpetual title to a piece of land which bestows the exclusive right to deal, alter and use the land – subject to any third party rights the owner (or previous owner) has granted, or any rights granted by law. All other interests in the land including any leaseholds are derived from this freehold title.
Freeholder: The owner of the freehold.
Further Advance: An additional amount lent to the mortgagor under the terms of the original mortgage.
Ground Rent: A yearly sum paid to the lessor by the lessee.
Houses of Multiple Occupancy (HMO's): Are properties that contain more than one household.
Index Map Search: A search with the Land Registry to check if the property is registered.
Interest only Mortgage: A mortgage where only the interest is paid and the capital sum is settled at the end of the term by either the maturation of an endowment policy or by a pension scheme.
Intestacy: If a person dies without leaving a will then the distribution of property is subject to the laws of intestacy.
Land Certificate: An official certificate from the Land Registry detailing the ownership of a property where there is no legal charge. This document has now been replaced by electronic, downloadable versions of the register called an ‘Official Copy’.
Land Charges Search: A search at the Land Charges Registry to see if a person has pending bankruptcy proceedings against them or to see if there are any mortgages or interests against the property.
Land Registry: The central government agency that maintains a record or property and land ownership in England and Wales.
Land Registry Fee: Fee payable to the Land Registry to register any charges against a property including change of ownership.
Lease: A document giving the lessee the rights to possession and setting out all rights and obligations of the leasehold.
Leasehold: Where ownership of a property is for a limited period. The possession of the property is subject to an annual ground rent.
Leaseholder: Also known as the lessee, this is the person who owns the leasehold on a property.
Lessee: This is the current owner of the leasehold property as opposed to the owner of the freehold.
Lessor: This is the landlord or owner of the freehold who is entitled to the ground rent and the possession of the property at the end of the lease term. The term can also apply to a leaseholder who has granted a lease out of their own leasehold title (an ‘underlease’)
Limited Title Guarantee: The seller only guaranteed their own dealings with and knowledge of the property. This guarantee should only be accepted where people are dealing with the land on behalf of the owners – such as an executor where the owner has passed away, or a trustee.
Local Search: A search with the local authority to establish whether there have been any notices registered affecting the use of a property or any proposals for the local neighbourhood that will affect the property.
Mining Search: A check to see if the property could be affected by mining activity in the local area that may lead to subsidence.
Mortgage: A loan to a person guaranteed by a property. The mortgagee lends the mortgagor money under the legal condition that the loan is repaid before the property is sold. If the mortgagor does not keep to the agreed repayments, the mortgagee has extensive powers to take possession and sell the property.
Mortgage Deed: The document that is signed to create the legal charge. The charge is registered against the property at the Land Registry.
Mortgage Offer: The terms under which the mortgagee is prepared to make the mortgage loan.
Mortgage term: The length of time the mortgage is to be repaid in.
Mortgaged: A property that has been charged by the owner of the mortgage or the mortgagee.
Mortgagor: The borrower who takes out the mortgage.
Occupier’s Consent: A person who occupies a property but will not be signing the mortgage deed agrees to vacate the property if the mortgagor defaults on the loan and the mortgagee takes possession.
Party Wall: A wall owned jointly with a neighbour, the maintenance of which is a shared responsibility.
Planning Permission: Approval by a local authority to the building or changing of a property or extension to an existing property.
Power of Attorney: A document signed to grant appoint someone else to act as their attorney.
Private Road: A road whose maintenance is down to the property owners rather than the local authority. The property owners need to have rights over the road as it does not necessarily have public access.
Property Information Form: A document provided by the seller giving information about the property to the buyer such as who maintains boundaries and whether there are any on going disputes.
Purchase: The buying of a property.
Purchaser: The buyer.
Probate: The legal process of establishing the validity of a will before a judicial authority.
Redemption: The repayment of an existing mortgage.
Redemption Penalty: A penalty charge by the lender for a mortgage redeemed within a fixed rate, discounted rate or cashback period.
Registered Land: A property that has been registered with the Land Registry.
Remortgage: Changing a mortgage from one lender to another.
Rentcharge: Some freehold properties are subject to a rent charge. This charge could exist to insure an income for the original owner or to ensure that estate covenants can be enforced more easily.
Repayment Mortgage: A mortgage where interest and some of the initial capital is paid by the borrower each month.
Sale: The sale of a property.
Seller: Someone who sells a property.
Service Charge: The payment to the lessor or property manager to cover the cost of maintenance and the running of a development.
Stamp Duty: A tax paid to the government on the purchase of a property over a certain value.
Subsidence: Often seen as cracks in the walls, subsidence is caused by inadequate foundations or major changes to the underlying land of a property.
Survey: A report on a property drawn up after an inspection by a surveyor.
Tenant: A person that pays rent to use or occupy land, a building, or other property owned by another.
Term Assurance: Life insurance that lasts for the term of the mortgage.
Tin Search: A search to establish if the property may have been affected by tin mining activities.
Title: right of ownership to a property.
Title Deeds: The documents that demonstrate entitlement to ownership of a property.
Transfer: A document that changes ownership of a property from one person to another.
Transfer of Equity: A document transferring ownership of a share or interest in a property form one person to another.
Tree Preservation Order: An order made by the local authority protecting a tree or group of trees. Special authority must be granted to cut down or in any way harm the trees.
Unregistered Title: Where the title of the property has not been registered with the Land Registry.
Vacant Possession: Possession of the property is taken when it is free of people, possessions and rubbish.
Valuation: A form of survey to establish just the value of the property.
Vendor: The person selling the property.
Wayleave Agreement: An agreement entered into by the property owner and a service provider for the right to pass pipe or cable through the property.
Will: A declaration of how a person wishes his or her possessions to be disposed of after death.
