Glossary – Residential Property

Bankruptcy Search

A bankruptcy search will need to be made in respect of each buyer and any other individual contributing to the purchase price either by way of gift or loan, both at the outset of the transaction and once contracts are exchanged.

Bridging Loan

When there is a delay between the purchase of your new property and the sale of your present property then a loan may be needed to “bridge the gap”.

Cash buyer

There are 2 types of cash buyer

(a) a person who already has the purchase money saved or deposited in a bank or
building society account; or

(b) a person who can pay for your property with the proceeds from the sale of their
own property and does not need a mortgage.

Chancel Repair Liability

Due to a change in the law which came into effect in October 2013, there is an ever-decreasing possibility that the property you purchase may attract a liability to contribute to the costs of chancel repairs in churches in and around the locality of the property. As part of the process of checking the title to the property before we exchange contracts, thereby committing you to the transaction, we will see if chancel repair liability might be relevant to the property you are purchasing. If it appears that there may be a risk of chancel repair liability we will then report back to you and discuss with you what steps we should then take.

Completion

This is when a sale / purchase is finalised and is usually your moving date. Monies are passed over and the buyer has the legal right to the property.

Conveyancing

The legal transfer of a property from one owner to another.

Covenant

A restriction or condition affecting the property which must be complied with.

Declaration of Trust

A document setting out in what proportions you own the property and what will happen to the proceeds of sale once the property is sold.

Our article explains in more detail what a declaration of trust is and why it might be useful to have one in place.

You might also be interested in our article that details what you need to think about if you are moving in with your partner here.

Deed of Covenant Fee

This is a document that you, the purchaser, will sign to say that you agree with and will abide by the terms of the lease. It is a legally binding agreement that states that one person will pay the other an agreed amount - to pay ground rent and service charges - and will also agree to observe any restrictions that the lease may contain.

Your lawyer will prepare this for you but the Landlord / Management Company may charge a fee for updating their records. Your lawyer will pass this fee directly to you.

Deeds

These are all of the legal documents relating to the ownership of the property. These are generally of limited relevance nowadays as the ownership of the vast majority of properties is electronically registered at the Land Registry.

Deposit

This is a part payment of the agreed purchase price paid by the buyer on exchange of contracts. Most contracts provide for the buyer to pay 10% of the purchase price.  If you feel you will be unable to pay a full 10% deposit you must let your conveyancer / solicitor know at the beginning of the purchase process so that they can try to make other arrangements for you.  This can frequently be arranged, especially where there is a chain of transactions involved. In the very rare event that a buyer backs out of the purchase after exchange of contracts, the full 10% would be forfeited.

Easement

A right over somebody else’s property, for example a right of way over an access way.

Energy Performance Certificate (EPC)

In England and Wales when you are selling a property you are required to provide an EPC for that property. This gives details of the energy efficiency of the property. Your estate agent will normally arrange this for you, but if you do not have an estate agent we can advise you in this area.

Environmental Search

This search looks at factors concerning the environment in which the property is situated.  It advises on, amongst other things, the flood risk to the area, whether the land on which the property is sited could potentially be contaminated by previous industrial use, whether there are any potential infrastructure developments such as wind farms and also whether it may be affected by radon gas emissions.  It also advises on planning permissions granted in the vicinity of the property.

The risk to properties from climate change is a current issue of great importance and so we would recommend that you give consideration to this as part of your purchase.  As climate change occurs this can affect different properties in different ways such as coastal erosion, flooding, shrinkage of sub-soil and other issues.  It is beyond our expertise as legal advisers to advise you on matters of this type.  However, what we can advise is that if a property is affected by any of the above matters then it can have a significant adverse effect on its’ re-sale value.  The environmental searches which we order give consideration as to the likely effect on properties in the short term (the next 5 years) and the longer term (the next 30 years).

Exchange of Contracts

This happens when all necessary searches and enquiries have been satisfactorily concluded and when both parties, the buyer and seller of a property, have signed identical documents (contracts) and the purchaser has given the agreed deposit to their conveyancer / solicitor. Once exchange of contracts has been “formally” agreed, both sides are legally bound to complete the transaction.

First Registration

During the last 90 years, the Land Registry has been compiling a central register of property and land in England and Wales. It is now compulsory to register with the Land Registry any sale, purchase, deed of gift, mortgage, new lease or assent (which is a transfer following the death of the legal owner). Compulsory registration has been phased in gradually in different areas over the last 30 years or so. Therefore, if you purchased your property or land before 1986, it is likely that the title to your property is unregistered. This means a record of your ownership is not held centrally at the Land Registry.

If your property is not registered the TSP Residential Property team can complete the first registration of your property for you. The team have also written a series of informative articles on the subject which you can access below.

Is Your Property Registered at the Land Registry?

The Land Registry Property Alert System

Registering ownership when you have lost your property deeds

What do I do with my Title deeds?

Freehold

Buying a freehold property means that the property and the land on which it stands will be fully owned by the purchaser.

Insurance

Your mortgage lender will usually discuss insurance with you. There are 2 types of insurance that you will need:

• Buildings Insurance: cover for the bricks and mortar of your home
• Contents Insurance: cover for your household contents. You will need to work out
how much cover you need

A buyer should arrange insurance cover for their new property from “exchange of contracts”. However, if you are buying a flat the landlord will already have buildings insurance in place so you will not have to arrange this.

Land Registry Registration Fee

This fee is paid through your conveyancer / solicitor to register your ownership of the property with the Land Registry. The scale of fees, generally based on the purchase price of the property, is fixed by the Government. In many cases we are able to deal with registrations electronically by way of an online application, which not only speeds up the process but often attracts a reduced fee (although some transactions, including leases, are still subject to the full fee payable for a postal application, even if submitted online). The fees are currently as shown in the table to the below.

Correct as at 04/09/2024. Please visit the Land Registry for the most up to date pricing

Land Registry Search

This is a search carried out before completion to check that there have been no charges to the property title and to enable us to register you as the new owner of the property following completion.

There are other searches available and we can discuss these with you in detail if we consider they are appropriate.

Leasehold

Buying a leasehold property means that your right to hold or use the property is granted by a lease for a fixed number of years. Ground rent on the lease is paid annually by the leaseholder to the freeholder. A service charge is also often payable. This is the contribution determined by and paid to the freeholder towards the cost of maintaining the building and/or estate that the property is in.

Leasehold Ground Rent

This is rent paid under the terms of the lease to the owner of the land on which your property is built. The lease will specify the amount that is due on an annual basis. When buying a leasehold property you may be liable to pay a portion of the ground rent that the seller has already paid in advance, this is called apportionment.

Leasehold Information Pack

If you are selling a leasehold property we will need to apply to the Management Company for their Management Information Pack which provides replies to specific enquiries and details regarding service charges and buildings insurance etc. This expense varies from Management Company to Management Company.

Sometimes there may be a different companies managing ground rent and service charge in which case this additional cost will need to be paid twice and may be charged at different rates depending on the individual management company.

Leasehold Service Charge

This is an annual charge for services that the landlord is obliged to provide under the terms of the lease and includes maintenance and repairs for example. The lease will specify the amount that is due on an annual basis. When buying a leasehold property you may be liable for a portion of the service charge that the seller has already paid in advance, this is called apportionment. Read more here.

Lender

This is the bank, building society or other financial institution with which you arrange your mortgage. The lender is sometimes referred to as the Mortgagee. As the borrower you will sometimes be referred to as the Mortgagor.

Local Authority Search

Apart from local road proposals affecting land within 200 metres of the property, the Local Authority search will only give information about the property itself, concerning the effect of Town & Country planning legislation, liability for road charges, compulsory purchase or demolition orders, financial orders and other matters which could vitally affect it.

The search will not give information about other property, for example the development of neighbouring land. If, therefore, you are concerned about the possibility of a development or any matters relating to other property or land in the neighbourhood, you should make enquiries yourself of the local authority before you consent to the exchange of contracts on your purchase. We can explain how this can be done. Alternatively there are specialist agency companies who can carry out these enquiries for you. This would involve a separate fee to that agency; if you would like further details please let us know.

Mortgage

This is a loan specifically to buy a property. Most people will need to take out a mortgage when purchasing a property.

Notice of Charge Fee

If you are buying a leasehold property the Landlord (freeholder) or Management Company must be notified of any new mortgages or legal charges held against your property. Your lawyer will prepare and serve this notice but the Landlord / Management Company may charge a fee for updating their records. Your lawyer will pass this fee directly to you.

Notice of Transfer Fee

If you are buying a leasehold property you will need to serve the Landlord (freeholder) or Management Company with a notice of transfer officially notifying them that the ownership of the property has transferred to you.

This needs to be done so that they have the correct details for the payment of the service charge and ground rent. Your solicitor will prepare and serve this notice as part of the legal work that they undertake on your behalf however the Landlord or Management Company will often charge you a fee for updating their records.

This fee is set by the Landlord / Management Company.  Your solicitor will pass this fee directly to you.

Official Copies of Your Registered Title

We will need to obtain up to date official copies of your title from the Land Registry. The Land Registry currently charge £7.20 (including VAT) for this. Subsequent title documents may need to be obtained from the Land Registry if they affect your title. We will advise you of any additional cost at the time, if applicable.

Search Pack

For information and advice on the Searches that are available see here.

Stamp Duty

Stamp Duty or Stamp Duty Land Tax (SDLT) as it is properly known is a government tax charged on land and property transactions in the UK. Find more information here.

TSP Bank Telegraphic Transfer Charge (TT)

We will charge you an additional fee, which will include VAT, for each telegraphic transfer that we execute on your behalf.

For a sale transaction this will usually be charged where there is a mortgage to repay and also if there is a balance of funds to be returned to you for which you require payment the same day. If you choose to receive any balance of funds via BACs transfer or as a cheque you will not incur this charge.

For a purchase transaction there will usually be at least one charge when we send your purchase money to the seller’s solicitor.

For a re-mortgage there will usually be at least one charge when we send the balance of funds to repay your outgoing lender.

Water & Drainage Search

This type of search will enable us to find out whether the property is connected to the mains drainage and mains water supply. It will also show whether there is a mains sewer passing through the garden of the property and if the property is on a metered water supply.

Will

A legal document that allows a person to make decisions about how his or her estate will be managed and distributed following their death. As a homeowner it is advisable to make a will or consider whether an existing will needs altering.