Solicitors terms | Listed buildings
Legal Terms: A guide to solicitors’ terms
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
ABSOLUTE TITLE
The highest form of title available in terms of land registered at the Land Registry. Possessory title is the least form available and is not normally acceptable as security to a lender.
ABSTRACT OF TITLE
A summary of the title deeds by which a Vendor proves his ownership of a property which is not registered at the Land Registry. As an alternative, an Epitome of Title may be supplied which represents photocopies of the Title Deeds.
ADVANCE
Money lent by Building Society (usually) to enable a borrower to purchase. The property provides the security for the loan.
ANNUITY LOAN
Also known as a repayment loan.
ASSIGNMENT
This is the deed by which a lease of unregistered land is transferred.
BANKERS DRAFT
A form of cheque guaranteed and signed by an authorised signatory on behalf of the Bank which is treated as being equivalent to cash.
BENEFICIAL OWNER
Person owning land and entitled to it for his or her own benefit.
BRIDGING LOAN
A loan, usually from a Bank, to tide a person over between the time when such a person has to pay the purchase price of one house and the time when the proceeds of sale of another become available.
CAUTION
An entry on the land register protecting the interests of a third party.
CHARGE
Also known as a mortgage or legal charge.
CHARGE CERTIFICATE
The certificate issued by the Land Registry to the mortgage (lender) of a property which has a registered title. In effect it is a Land Certificate with a copy of the mortgage added to it. When there is no mortgage, a Land Certificate is issued instead to the registered proprietor (the owner).
CHARGES REGISTER
One of the three parts (the others are the Property Register and the Proprietorship Register) which make up the Register and the Land Registry of a property with a registered title. The Charges Register contains details of restrictive covenants, mortgages and other interests, subject to which the registered proprietor owns the property.
COLLATERAL
Property pledged as a guarantee for the repayment money.
COMPLETION
The culmination of the procedure in the transfer of a property, when the necessary documents and the keys are handed over in exchange for the purchase price.
COMPULSORY PURCHASE
The acquisition of property by a Local Authority or other official body, whether or not the owner wishes to sell under a power to do so contained in an Act of Parliament.
COMPULSORY REGISTRATION OF TITLE
The requirement that the title to a property (when next sold) should be registered at the Land Registry. Most areas are now subject to compulsory registration of title.
CONDITIONS OF SALE
The detailed standard terms (the small print) which govern the rights and duties of the Purchaser and the Vendor of the property, as laid down in the Contract which they sign. Until recently there were two forms of Conditions commonly in use in property transactions, namely “The National Conditions of Sale” and “The Law Society’s Conditions of Sale”. However in March 1990 the First Edition of the “Standard Conditions of Sale” were published which is an amalgamation of the National Conditions and the Law Society’s Conditions.
CONTRACT
Any legal binding Agreement: On the sale of the property this is the document, in two identical parts, one signed by the Purchaser and the other by the Vendor, which when the parts are exchanged, commits both parties to complete the transaction by transferring ownership in exchange for paying the purchase price.
Section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 (which came into force on the 27th September 1989) now provides that Contracts for the sale of land “can only be made in writing and only by incorporating all the terms which the parties have expressly agreed in one document or, where Contracts are exchanged, in each”. An important practical effect of this is that it will no longer be possible for a Contract for the sale of the land to be constructed out of an exchange of letters. Likewise it will not be possible in the future for a Contract to be amended by means of a “side letter”.
CONVEYANCE
The deed by which the owner of a freehold property with an unregistered title transfers ownership to the Purchaser.
COVENANT
A covenant is an obligation on the part of one person to another and generally comprised in a Deed. The two main types of covenants are “positive (personal)” and “negative (restrictive)”. A typical personal covenant would be “To erect a fence along the northerly boundary” whilst a typical restrictive covenant would be “Not to use the property other than for residential purposes”.
COUNTERPART LEASE
This is signed by the purchaser-tenant on the purchase of a new leasehold interest created in land. The vendor-landlord signs the original lease.
DEPOSIT
Portion of the purchase price – usually 5 or 10% – paid on or before contracts are exchanged with the vendor.
EASEMENT
A right which the owner of one property has over an adjoining property, such as a right of way or access to a sewer.
ENDOWMENT ASSURANCE
Life assurance policy taken out by the purchaser covering the term and amount of the mortgage or loan which pays off the capital sum of the mortgage at the end of the term and provides lump sum balance for the purchaser. Alternatively, if the purchaser should die during the term of the mortgage loan the policy matures and is used to repay the mortgage loan.
ENGROSSMENT
The actual deed or document which is executed or signed, as opposed to a mere draft of it.
ENQUIRIES BEFORE CONTRACT
A collection of detailed questions about many aspects of a property which the vendor’s solicitors are generally asked to answer before the purchaser is prepared to sign a Contract. Also called preliminary enquiries.
ENQUIRIES OF LOCAL AUTHORITY
A number of questions asked of a Local Authority on a printed form about a particular property. The form is usually sent with and loosely speaking forms part of, the purchaser’s “Local Searches”.
EQUITY
Net value of a mortgaged property after charges are deducted.
EXCHANGE OF CONTRACTS
The stage in the sale of a house at which the two parts of the Contracts signed by the purchaser and the vendor are literally exchanged one for the other and whereby the parties both become legally bound to go through with the transaction.
FREEHOLD
The absolute ownership of property, as opposed to leasehold which is ownership limited to a period of years.
GROUND RENT
A periodical payment made by a tenant-lessee payable under the terms of a lease.
INDEMNITY
A collateral contract used as an insurance against loss.
LAND CHARGES REGISTRY
A Government Department now based in Plymouth which keeps a Register, open to public search of certain charges on land in England and Wales, the title of which is unregistered. It is quite distinct from the Land Registry, which deals with properties where the title is registered.
LAND CERTIFICATE
The certificate issued by the Land Registry to the owner of a property which has a registered title evidencing ownership of the property etc. When the property is mortgaged, a Charge Certificate is issued to the mortgagee (lender).
LAND REGISTRY FEES
Fees paid by a purchaser to register his title with the Land Registry. The scale of fees is set by the Government.
LAND REGISTRY
A Government department with district registries in various places in England and Wales. It is responsible for opening, maintaining and amending the registers of all properties in England and Wales which have registered titles. Not to be confused with the Land Charges Registry, which deals with properties which have unregistered titles.
LEASE
Ownership of property by way of a leasehold interest for a term fixed in the lease usually with the reservation of an annual ground rent.
LEASEHOLD
Land held under lease for a term of years.
LESSOR
He or she who grants a lease – the Landlord.
LIEN
The legal right of one person to hold the property of another as security for a loan.
MORTGAGE
(Sometimes called a legal charge). A deed whereby freehold or leasehold property is pledged as security for a loan. It gives to the lender (such as a Building Society) certain rights to the property, including the power to sell if the mortgage payments are not paid. These rights are cancelled when the money advanced is repaid with interest, in accordance with the agreed terms.
MORTGAGE PROTECTION POLICY
An insurance policy taken out by a mortgagor to ensure that in the event of the mortgagor’s death, the outstanding portion of the loan will be paid off. Not used when an endowment policy is used to pay off the loan.
MORTGAGE TERM
Length of time over which a mortgage agreement will run.
MORTGAGEE
One who lends money on mortgage, usually a Building Society, Insurance Company, Bank or Private Lender.
MORTGAGOR
One who borrows money on a mortgage, usually to enable him to buy a house.
OFFICE COPY
An authenticated copy of an official document issued by the Land Registry.
OFFICIAL SEARCH
An application to an official authority (such as a local authority, the Land Registry or the land charges Registry), to find out some relevant facts about a particular property.
OWNERSHIP
Interests capable of protection, enforceable in law, absolute or restricted.
POSSESSORY TITLE
The description given by the Land Registry to the title or ownership of a property where, due to some defect in the title, the registry is not entirely satisfied as to the owner’s ownership of the property, but only satisfied that he is lawfully in possession of the property, as opposed to title absolute and good leasehold title.
PRINCIPAL
The amount of the loan on which interest is calculated.
REDEMPTION
The final payment on a mortgage.
REGISTERED TITLE
Title or ownership of freehold or leasehold property which has been registered at the Land Registry, with the result that ownership is guaranteed by the state.
REPORT ON TITLE
Solicitor’s certificate confirming that the title to the property is acceptable. A Building Society must have one before an advance cheque for the mortgage monies can be issued.
RESTRICTIVE COVENANTS
Clause inserted in a deed restricting the use of land.
RIGHT OF WAY
The right of an owner of a property over land in the ownership of another person normally the subject of a Deed of Easement.
ROAD CHARGES
The charges imposed on the owners of properties along a road, usually according to the length of the frontage of each property, for the cost of making up or repairing the road. In this connection the Company enters into a covenant in the Transfer Deed to indemnify the purchaser against any liability for such charges arising in respect of the estate road.
SECTION 106 AGREEMENT
An agreement under Section 106 of the Town and Country planning Act 1990 (previously called Section 52 Agreement under the 1971 Act) entered into between the local planning authority and the landowner/developer restricting and regulating the development of land. The purpose of such an Agreement is to enable a local authority to obtain a “planning gain” by imposing on a developer an obligation to carry out works not included in the development or to seek some payment right or benefit in return for granting planning permission for the development which might not otherwise have been permitted.
SOLICITOR’S UNDERTAKING
A letter signed by a solicitor which he personally guarantees on behalf of his clients. It is his professional duty to honour such an undertaking, even though he may suffer financially as a result, if his clients default.
STAMP DUTY LAND TAX ( SDLT )
A transactions tax payable to the Inland Revenue on transfers of UK land and buildings. The general rule is that the tax payable is a percentage of the chargeable consideration for the transaction, as follows:
Residential
not more than £125,000 – 0%
more than £125,000 but not more than £250,000 – 1%
more than £250,000 but not more than £500,000 – 3%
more than £500,000 – 4%
Note: Non residential or mixed commercial and leases are subject to different SDLT rates
SUBJECT TO CONTRACT
Provisionally agreed, but not so to constitute a binding legal contract. If the purchaser and the vendor have agreed terms “subject to contract” either may still back out without giving any reason.
SURVEY
Also known as a structural survey. Inspection of the property by and independent surveyor.
TENANT
Person who is in possession of property usually by way of a lease.
TENURE
Set of conditions by which a tenant holds his land or property.
TOP UP
A second mortgage granted by an insurance company or bank.
TRANSFER
A deed which transfers ownership of a freehold or leasehold property, the title to which is registered at the Land Registry (as opposed to the deed used where the title is unregistered, which is a Conveyance in the case of a freehold, and an Assignment in the case of a leasehold.)
UNDER OFFER
When the vendor has had an acceptance offer for his home but contracts have not yet been exchanged.
VALUATION
An assessment of the value of a property. A building society or other lender must commission a valuation before a loan can be made. A valuation survey is quite distinct from structural survey in that it is not a detailed inspection of the property.
VENDOR
The owner of a property attempting to sell it.
WAYLEAVE AGREEMENT OR CONSENT
A document normally associated where a landowner/developer permits third parties such as service companies to lay pipes, wires and cables in, on or over land.
WRIT
Or summons. Method of commencing court proceedings.
