Conveyancing law can be a maze. Associate Solicitor Karen King has gathered the most common head-scratchers in this article to give you some help you find your way around the conveyancing jargon.
Buildmark – This is the warranty that covers any structural defects for a new build property. BDW Trading usually use National House Building Council (NHBC) and this warranty usually cover building regulations. It usually lasts for 10 years from the date of completion.
Building regulations – This is the regulations which govern the design, alteration and construction of buildings. The local council or new build warranty provider will determine whether these standards have been met and if compliant, a final certificate will be issued.
Completion – This is when you can collect the keys and move into the property.
Conveyancing – The term used to describe the transfer from one owner to another. The conveyancer is the person dealing with the conveyancing.
Covenant – If you buy the freehold/leasehold the Transfer/Lease will contain covenants which are restrictions on what you can and cannot do at the property.
Easements – These are rights granted in favour of a property. An example of this would a right to use the access road to access the property. These are usually defined in the title deeds to a property.
Exchange – This is when you formally enter into the contract which means you have legally agreed to buy/sell a property. Once you exchange contracts it means you cannot withdraw from the transaction and if you do, you could be subject to financial penalties as per the contract terms. We will not proceed to exchange without your authority. The usual procedure for exchange is to ring the other party’s solicitor to read and agree the major terms of the contract. Please note some parts of the contract have been left blank and these will be included on exchange.
Exchange deposits – This is the amount needed to exchange contracts.. For a Help to Buy matter the deposit is 5% of the purchase price less any reservation fee. For non Help to Buy matters it is 10% of the purchase prices less any reservation fee paid.
Freehold – If you obtain the freehold you have acquired the entire legal title to the land. The terms under which you hold the property are usually covered under a Transfer document.
Insurance – You will be required to put insurance in place on completion to cover the property you are buying. This will pay out as per the terms of the insurance if the property has been damaged. It is up to you whether you put in places contents insurance.
Leasehold – If you obtain the leasehold, you will acquire a Lease of the property (granted out of a freehold title) for a number of years (usually 125 years). The Lease will set out the rights which the Property will benefit from and the obligations imposed and restrictions on the use of the land.
Management company – This is a company formed to look after parts of the estate (if you property is freehold or leasehold) or building ( if your property is leasehold). It will usually recover the costs of performing these services from service charge.
Reservation agreement – This is an agreement you usually enter into when buying a new build property which outlines the terms of the property you are buying along with your details. Under this agreement you will agree to exchange (buy) the property within the reservation period (usually 28 days from the date of the reservation but this can be less). You will also need to pay a reservation fee which is an initial amount to secure the property and this will be taken into account when we request your exchange deposit.
Reservations – These are rights reserved in favour of another property over your property. For example, if there was a shared access way within the boundaries of your property, there could be a right of way granted to your neighbour for them to access their property.
Stamp duty – Stamp duty is the tax payable when you purchase a property. The rules and amount payable are varied so once you instruct us we will inform you as to the amount payable.
Standard conditions on sale – The contract will refer to standard conditions of sale. These are standard conditions which are fair to both the seller and buyer and are used in most if not all conveyancing transactions.
Title deeds – There are papers which will contain information about the property you are purchasing/selling. The main title documents (Official Copies) can be obtained from the Land Registry. These include the following information who owns the property, property address, rights, reservations and covenants granted under the property. It will also refer to other title documents relating to that property.