Chard London Estate Agents - Estate agent Jargon
When you sell, buy, rent or let property in London you will hear a great deal of property related jargon and other sometimes confusing terminology used by estate agents, solicitors, accountants, surveyors, mortgage brokers and other professionals within the real estate industry in London.
To assist you we've set out the most commonly heard property jargon below together with concise explanations.
If you come across a word or term that you would like to have explained or clarified we're here to help.
Please contact us here.
Advance
Money lent by a Bank or Building Society to buy or improve your house. Secured on the property and often called a Charge or Mortgage.
Agreement
Document containing terms of your sale or purchase often called a Contract.
Banker's Draft
Cheque issued by a Bank or Building Society guaranteed to be paid.
Bridging Loan
Loan from a Bank to enable property to be purchased before Sale of existing house. Very risky if it is an "open" bridge where Contracts have not yet been exchanged on your sale. High rates of interest apply generally.
Building Service Charges
Charges levied by a building's freeholder or managing agent to cover outgoings that are the collective responsibility of all leaseholders to pay such as buildings insurance, exterior and common parts maintenance, shared gardens upkeep, lift maintenance, porters and ancillary staff salaries as well as fees levied by the managing agent for administering the process.
Buy To Let
Popularised term used for investors buying property specifically to let to tenants.
Buyer
The person purchasing a property otherwise known as the Purchaser
Chain
Successive buyers and sellers reliant upon one another to complete their transaction can only proceed as the pace of the slowest link.
CHAPS Transfer
A form of bank transfer that normally means same day payments into the beneficiaries account if made before the bank's daily deadline. Banks charge more for CHAPS transfers than normal bank to bank transfers.
Charge Certificate
Document of Title issued by the Land Registry subject to a Mortgage.
Completion Date
A date fixed in the Contract when all monies are paid over and the keys are released and the sale or purchase is finalised.
Completion Statement
A Statement prepared by your legal adviser setting out the income and expenditure involved in your transaction
Conditions of Sale
Legal conditions implied into the Contract which are in a standard form agreed by the Lawyers. may not necessarily be reproduced in the Contract. Generally only referred to if things go wrong.
Contract
The document setting out the parties, the properties and any special terms and conditions relating to your sale or purchase
Conveyance
The legal document transferring ownership from seller to buyer..
Covenant
A legal promise incorporated in the Title requiring either the seller or the buyer to do or not to do something in relation to the property.
Declaration of Trust
A document binding joint owners of property governing the division of proceeds of sale upon completion.
Deeds
Legal documents proving ownership of the property.
Deposit
Monies paid by the buyer on exchange of Contracts. Generally at least 5% of the purchase price.
Dilapidation Claim
The costs submitted by a Landlord at the end of a tenancy to be deducted from the tenant's deposit. These costs should be based on an inventory and a check in report
Disbursements
ees paid out by your legal adviser to other parties such as Stamp duty, Land Registry and Local Authorities.
Draft Contract
Preliminary, unconfirmed version of the contract.
Easement
Right given to someone who is not the owner of the land such as a right of way or a right to lay or maintain pipes for services.
EPC
An Energy Performance Certificate is needed by all properties (for sale or to let) put on the market; it contains a graph which shows how energy efficient the property is on a scale of A-G.
Engrossment
The final copy of the Conveyance or Deed which you will be asked to sign
Estate Agents / Lettings Agents Terms of Business/Terms and Conditions
A contract between a Landlord or Vendor and the letting agent or estate agent stipulating each party's responsibilities and obligations, together with the agent's fee structure.
Exchange of Contracts
he time at which the Contract becomes legally binding and you are then committed to the transaction.
Filed Plan
Plan prepared and held by the Land Registry identifying the extent of the property.
Fixtures and Fittings Form
A form annexed to the Contract listing the items included in the sale.
Freehold
Absolute ownership of the land upon which the property is built.
Full Structural Survey
A detailed examination of the structure of the property undertaken by a qualified surveyor.
Gross Rental Yield
The gross (total rent) received without deduction or allowances for wear and tear and other disbursements within the accounting period (normally one year) divided by the capital cost of the asset, either based on it's current value or it's original purchase price, expressed as a percentage.
Guarantor
Person (or legal entity) who assumes responsibility for paying the rent, and usually of any shortfall in deposit in the case of excessive dilapidation, should the tenants not pay within a set period of time.
HIP
Home Information Pack - set of documents, including local authority searches and an EPC (see above), needed before a property can be marketed for sale.
HMO / House in Multiple Occupation
A building that is licensed and subject to current HMO legislation (covering primarily health and safety issues of the residents) for the occupation of multiple, unrelated tenants.
Inventory
A document that is referred to in the tenancy agreement listing the property's contents. It is signed and agreed by both landlord and tenant at the start of the tenancy and is generally referred to in the Tenancy Agreement
Inventory Check in (and schedule of condition)
A document that is drawn up at the beginning of a tenancy by an independent inventory clerk listing the differences between the inventory and the property's current contents and condition, including cleaning, paintwork, etc. This document is then used to check the condition of the property at the end of the tenancy
Inventory Check out
A document that is drawn up at the end of a tenancy by an independent inventory clerk comparing the inventory and the inventory check in with the property's current contents and condition. This document is then used by the Landlord to assess a dilapidation claim, if applicable
Joint Tenants
Where one person owns a property jointly with others. Upon the death the survivor automatically inherits the deceased's share of the property.
Land Registry
Central Registry responsible for recording ownership of land
Land Registry Fees
Fees paid to Land Registry to record your purchase.
Landlord's Agent
The person/company named in the Tenancy Agreement who acts on behalf of the Landlord. Generally the letting agent.
Leasehold
An interest in land subject to an annual payment or rent to the freehold owner (Landlord) for a specified term.
Lease
The document containing the terms and conditions of occupying leasehold land.
Legal Fees Insurance for Landlords
An insurance policy, usually subject to numerous caveats, that pays the landlord's legal fees should it become necessary to pursue a claim against a tenant or defend a legal claim from a tenant.
Lender
Institution that lends money to assist your purchase such as a Bank or Building Society.
Lessee
Someone who holds the lease.
Lessor
Someone who grants a Lease otherwise known as a landlord.
Local Search
Enquiries raised of the Local Authority to confirm whether the property is affected by any proposals, restrictions or rights of way which could materially affect the enjoyment of the property.
Managing Agent
The company or person employed by a building's owner (freeholder) to manage and account for the day to day running of the building.
MIG
Mortgage Indemnity Guarantee usually insisted upon by Building Societies if you are borrowing more than 90% of the purchase price. Effectively an Insurance Policy for the Exclusive benefit of the Building Society which guarantees Repayment of their loan if default offers within 12 months. Premiums sometimes paid by you or the Building Society.
Mortgage
The document signed by you ultimately recorded at the Land Registry containing the terms and conditions of your loan. The Lender is entitled to hold the deeds as security against the loan to ensure that it is fully repaid.
Mortgage Deed
The document signed by you ultimately recorded at the Land Registry containing the terms and conditions of your loan. The Lender is entitled to hold the deeds as security against the loan to ensure that it is fully repaid.
Mortgagee
Bank or Building Society.
Mortgagor
The Borrower
Mortgage Valuation
A valuation undertaken on behalf of the Mortgagee to decide how much to lend on the security of the property.
Net Rental Yield
The net (total rent) received allowing for various deductions and allowances for wear and tear and other disbursements within the accounting period (normally one year) divided by the capital cost of the asset, either based on it's current value or it's original purchase price, expressed as a percentage. Costs usually taken into consideration to calculate net rental yield include wear and tear, professional fees, insurance, service charges and ground rent (where the property is leasehold).
NHBC
National House Building Council. Regulatory body for new or converted properties who issue a 10 year structural guarantee.
Office Copy Entries
Copy of the details held by the Land Registry relating to the property
Option to Renew
where the Tenant has the option to renew an existing tenancy agreement. This is contingent on the Tenant not being in default and exercising the option within a set period before the expiration of the current tenancy agreement. Usually the option will set out the terms of the renewal in terms of revised rent and future options (if any) to renew
Premises
In the Tenancy Agreement refers to the property itself. The Tenancy Agreement also specifies fixtures, fittings, furniture and effects as specified in the Inventory
Professional Sharers
Where a group of two or more people rent a property and are named on the tenancy agreement. They are normally joint and severally liable for the entire agreement. In practice, this means a claim for non payment of rent, dilapidation or loss can be pursued in whole or in part by any individual tenant at the landlord's discretion. It is particularly relevant to guarantors that the limit of their liability be confirmed when the person the are guaranteeing is sharing a rented property.
Property Information Form
Form completed by a Seller giving details of the property such as ownership of boundaries, guarantees and disputes.
Purchaser
The Buyer of a Property.
Redemption
Payment made when repaying a mortgage.
Redemption Figure
The actual sum needed to repay a mortgage including interest and redemption penalties.
Redemption Penalty
A sum charged by a mortgagee for early repayment of a mortgage. Generally only applies when advantageous terms were given by the mortgagee at the time the mortgage was granted i.e. Fixed Rate Interest.
Registered Land
The Title of Property which is registered at one of the government land registries.
Registration
The process whereby your Solicitor registers your purchase at the Land Registry
Retention
A sum of money held back from a mortgage advance until certain works specified by the mortgagee have been carried out.
Searches
Checks made with the Local Authority and Land Registry to find our whether any matters adversely affect the property.
Seller
The person selling a property.
Sinking fund
Reserve fund collected in addition costs to the service charge and kept for large repairs and maintenance to the building.
Stamp Duty
Duty Payable to the Inland Revenue by the buyer for properties coasting over £60,000. At the present time the rate payable on completion is 1% of the purchase price between £60,000 and £250,000, 3% for properties exceeding £250,000 but less that £500,000 and 4% thereafter (at the time of writing, December 2008)
Stakeholder
The person holding the Deposit for the duration of the Tenancy on behalf of both the Landlord and the Tenant. No deductions can be made without the written confirmation of both the Landlord and the Tenant or, failing that, without the consent of a court or a decision from the relevant Tenancy Deposit Scheme.
Subject to Contract
A negotiated sale that is not binding on either party to the transaction until actual exchange of contracts.
Telegraphic Transfer
Method of moving money electronically on completion from one Solicitor's bank account to another to complete the purchase. Banks normal make a charge for this service.
Tenancy Agreement
a contract signed by both the Landlord and the Tenant, which states each party's rights, responsibilities and obligations with regards to the letting and occupation of the property.
Tenancy Deposit Scheme
Introduced on 6th April 2007 with a view to protecting all Assured Shorthold Tenancies in England and Wales by preventing landlords and letting agents from unfairly withholding a deposit.
Tenant
The person/people or legal entity who rents/rent the Property from the Landlord. If there is more than one person, the Tenant's obligations apply to, and are enforceable against, each of them jointly and severally.
Tenant's Deposit
The security deposit paid by tenants before taking occupation held by the landlord, the landlord's agent or TDS against arrears(non payment) of rent and loss or damage to the property. Most lettings agents in Central London, Chard lettings Ltd. included, collect a deposit equivalent to six weeks agreed rent.
Tenants in Common
Denotes the capacity in which joint owners hold the property usually in defined shares.Term the fixed period of a tenancy, including any extension or continuation of it. This can be greater than the guaranteed minimum term where the tenant (or the landlord) has a break clause.
Transfer
Final document transferring the property from Seller to the Buyer used where the title is registered at the Land Registry.
Unregistered Title
Where the property is not registered at the Land Registry and ownership much be proved by Title Deeds which must date back at least 15 years.
Vendor
The Seller of the Property.
Wear and Tear (with reference to "reasonable")
A form of depreciation of a property and its contents that naturally and inevitably occurs as a result of a tenant living in a property. A Landlord should not claim for this from a tenant's deposit.
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