Conveyancing Jargon Buster (D – J)
CMS and its panel solicitors aim to speak and write to you in plain English in terms that are easy to understand.
See our jargon buster below to make sense of some of those words that the estate agents and solicitors use everyday (which may be some explanation).
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 £2,000,000 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.