Glossary of Terms - Selling Property

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

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.

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 – an Energy Label with a ranking 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.

Estate agent – a person/business who markets and negotiates on the sale of property; facilitating the introduction of buyers and sellers. Estate agents must make reasonable enquiries about a property and disclose any important information they become aware of to potential buyers.

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

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.

FENSA – a certification scheme for replacement window installers. FENSA members are certified as competent persons and can self-certify that replacement windows comply with building regulations, meaning you don’t need a separate assessment from a local authority building control inspector.

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.

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.

Listed status – 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 Historic England’s website. • local authority searches – a set of information about a property and/or land and the local area provided by the relevant authority.

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.

Negative equity – when your home is worth less than the amount you owe a financial provider or other organisation for your mortgage.

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

Probate – the process through which someone is given permission to deal with the estate (belongings and debts) of someone who has died.

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.

Redemption figure - the amount it will cost to pay back your mortgage early, which consists of the remaining unpaid mortgage, any early payback charges and a certain amount of interest.

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. More information is available on the Government’s website.

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

Reservation agreement – an agreement between the buyer and seller where each commits to a property transaction. May include a financial penalty for pulling out of the agreement to cover costs incurred by the other party during the transaction process.

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.

Snagging – defects or unfinished pieces of work in a new build home.

Sold subject to contract (SSTC) – an offer has been made on the property and the seller has accepted it, but they have yet to exchange contracts, so it is not legally binding.

Sole selling rights – this type of contract means that the estate agent is the only one able to sell a house during the period set out in the agreement. This means that even if you find a buyer yourself, you will still have to pay commission fees to the estate agent. If you engage another estate agent during the period stipulated and find a buyer through them, you may find you are liable for dual fees where both agents require payment.

Stamp duty/Land Transaction Tax – a tax paid upon purchase of any homes costing more than £125,000 in England (or £180,000 in Wales), unless you are a first time buyer.

(Home) survey – an agreed level of service to advise clients on the condition and matters relating to a property. The homebuyer’s survey should not be confused with a mortgage valuation.

(Home) surveyor – it is advisable to employ the services of a qualified surveyor to conduct a homebuyer’s survey before purchasing a property.

TA6 form (or TA7 form for leasehold properties) – Property Information Form which sets out information relating to a property for sale; e.g boundaries and disputes

TA10 form – known as the Fittings and Content Form or the Fixtures and Fitting Form. Sets out what fixtures and fittings are included in the sale of the property and which are excluded.

Title – legal ownership of a property.

Under offer – the same as ‘sold subject to contract’ - an offer has been made on the property and the seller has accepted it, but they have yet to exchange contracts, so it is not legally binding.