>Glossary of Terms - Buying Property

Completion – when your legal representative transfers the remaining funds to the seller’s legal representative and you take ownership of the property.

 Conservation area – an area with extra planning controls to protect its special historic and architectural elements such as original windows or doors. These controls are tailored to each area by the council. Find out if these controls apply to your area by contacting your local planning authority.

 Conveyancer – legal executive, licensed conveyancer or conveyancing solicitor who does the legal work to do with transferring the ownership of land or buildings from one person to another. They will generally owe a duty to their client to take reasonable care when carrying out that legal work.

 Credit score – a rating showing how likely a lender is to lend you money.

Decision in principle – a written statement from a lender to say that ‘in principle’ they would lend a certain amount to a particular prospective borrower.

Deposit – a payment passed on to your legal representative upon exchange of contracts, which represents a percentage of the purchase price.

Energy Performance Certificate (EPC) – an Energy Label with a ranking of between A and G that also indicates running costs and suggests suitable improvements which can be made to a property to make it more energy-efficient. An EPC must be provided to any potential buyer unless the property is exempt from EPC requirements.

Exchange of contracts – when contracts are exchanged between buyers and sellers. Legally binding and commits the parties to the property sale/purchase.

Estate facility charge – an annual fee for maintaining the wider estate on which a property is located, e.g. for upkeep of public areas

Equity – the difference between the property’s value and the outstanding debts you owe on it.

Event fee – a fee payable under a term of, or relating to, a residential lease of a retirement property on certain events such as resale and sub-letting. An event fee is sometimes referred to as an exit or transfer fee.

Fittings – items in your property that are not fixed down e.g. carpets, curtain rails, free-standing ovens, fridges, freezers and washing machines.

Fixtures – items in your property that are fixed to the floor or wall, e.g. light fittings, built-in wardrobes, boiler, radiators, plug sockets.

Freehold –where you own the land and the buildings on it outright.

Ground rent – A payment generally made annually by the leaseholder to the freeholder under the terms of a lease. Historically many ground rents are set at a minimal ‘peppercorn’ rate; but it is also common for the lease to provide that the ground rent increases at intervals. For example, initial ground rent of £100 per annum going up after 33 years to £150 p.a. and after 66 years increasing finally to £200 p.a. However, there can be substantially higher increases and more regular changes, so the amount and any consequential changes should be understood at an early stage.

Home survey – a report to advise clients on the condition and matters relating to a property.

HM Land Registry -  the organisation which registers the ownership of land and property in England and Wales.

Indemnity insurance – insurance that can be used during conveyancing transactions to cover a legal defect with the property that can’t be quickly resolved, or at all.

Lease – a document which sets out the rights and duties of landlord, leaseholder and any other party, such as a management company, who has rights and obligations in the lease.

Leasehold – where you own the right to occupy a property for a fixed number of years, typically 99 years or more.

Letter of engagement – sets out the terms of agreement between the client and their legal representative including client instruction, fees, timescales and other relevant information.

Listed building – listing marks a building’s special architectural and historic interest and brings it under the protection of the planning system. Depending on the category of listed building and the scope of alterations a householder may wish to make, listed building consent will need to be secured to make any changes that might affect the building’s special interest. More details are available on their website.

Local authority searches – a set of information about a property and/or land and the local area provided by the relevant authority.

LPE1 form – contains information about a property held by landlords, managing agents and management companies - for example, information on ground rent and service charges.

Mortgage valuation – an assessment made by your mortgage provider as to whether they are willing to lend you money against a property. This is not the same thing as a survey.

Ombudsman – an official organisation appointed to investigate individual’s complaints against a company or organisation.

Property chain – linked property transactions, where a seller of one property is a buyer of another.

Property searches – a legal professional will conduct legal searches when you are buying a property to ensure there are no other factors you should be aware of. Some searches will be recommended by your legal representative for all purchases and others will be required by the mortgage lender to protect them from any liabilities that the property may have.

Redress scheme – all estate agents are legally required to be members of a redress scheme. Schemes may be able to resolve disputes between estate agents and consumers once internal complaint processes have been exhausted.

Referral fee – a payment made from one business to another in exchange for referring customers to them.

Reservation fee – a payment made to a developer to secure a property.

Service charge – A contribution payable by a leaseholder typically to a freeholder or managing agent, for a share of the cost of insuring, maintaining, repairing, and cleaning the building.