Moving Home – Glossary of Terms
Completion
This is the date that ownership of the property passes from the seller to the buyer.
Contract
This is the agreement between the buyer and the seller. It sets out the main terms of what has been agreed such as the property, the price and the names of the parties. It also deals with the process if something goes wrong. Rather than making the buyer and the seller meet to sign the same contract, the seller’s solicitor draws up two copies of the same contract, and each party signs their own copy. When both parties are ready to legally commit, the two contracts are exchanged.
Deposit
This is a sum of money which is paid to the seller’s solicitor on exchange of contracts. It is usually 10% of the purchase price.
Environmental Search
This is carried out to check if there are any known environmental issues affecting the property, these include matters such as landfill or waste disposal sites in the area, whether the property has been built on an old industrial site and whether there are any risks from contaminated land, toxic emissions, flooding, subsidence etc.
Exchange Contracts
This is the point at which both parties become legally committed to proceed with the sale/purchase. Literally it is the exchange of one copy of the contract signed by the buyer along with the buyer’s deposit which is sent to the seller’s solicitor and another copy of the contract signed by the seller which is sent to the buyers solicitor. From the minute contracts are exchanged, the matter becomes binding. Once contracts are exchanged neither the price nor any other terms can be changed. If either party pulls out the person deemed so would be liable to pay compensation to the other person for any losses the other person has incurred.
Fixtures, Fittings and Contents Form
This is a list of the items at the property which are either included or excluded from the agreed price. This form is completed at an early stage by the seller and sent to the buyer, so that both parties understand what is included in the selling price.
Freehold
Ownership of both the property and the land it stands on.
Leasehold
This usually relates to flats which are generally purchased on a long lease e.g. 999 years.
Land Registry
A central body that retains records of who owns the land and under what conditions.
Local Authority Search
This is a list of questions about the property which are sent to the local authority. It covers such items as, whether the road serving the property should be maintained by the council, whether there have been any planning applications on the property, and a number of other things.
The search is against the property only and does not cover the surrounding area.
Mortgage
This is a loan to help you buy the property. The mortgage is ‘attached’ to your title deeds, and means that you cannot sell the property without paying it off at the same time.
Mortgage Deed
The legal charge of the property to the mortgage lender until such time as the loan is repaid.
Property Information Form
This is a questionnaire about the property completed by the sellers. It covers such items as guarantees, neighbour disputes and boundaries.
Redemption
The final payment of a mortgage loan.
Stamp Duty
This is simply a tax charged by the government and is related to the purchase price.
Survey
This is a report carried out by a surveyor on the physical state of the property you are buying.
Title Deeds
These documents firstly act as evidence that the person selling the property actually owns it, and secondly sets out any rights or obligations that affect the property.
Transfer Deed
This is the document that passes the ownership of the property from the seller to the buyer.
