|
When buying a new home, you will undoubtedly come across certain words and phrases that are frequently used by the construction, legal or finance industries but that may be ‘double-dutch’ to you. Here is a list of some of the most common ones and if there are any terms you come across that you would like explained in more detail, just ask.
Abstract of Title: A summary of all previous dealings in the property including sales, charges and easements.
Building Line: Set by the Local Authority and beyond which the front of any new building or extension to an existing one may not project.
Buildings Insurance: An insurance taken out by the owner or by the Building Society when a mortgage is granted on a property. The owner or the Building Society will pay the premium annually, in which case it is charged to the borrower. This insurance covers the building only, not the contents, and is calculated in accordance with rebuilding costs. It bears no relationship to the value of the property.
Buildmark: Your new Strathclyde Home comes with a Buildmark ten-year warranty and insurance cover provided by the National House Building Council (NHBC).
Charge Certificate: The Land Registry issues a charge certificate where there is a mortgage. This is in addition to the Land Certificate.
Charge: A legal term covering a registered claim against a property as a security for money owing.
Completion Statement (or State for Settlement): An account prepared by the seller or his/her solicitor, setting out exactly how much money he/she claims should be paid by the buyer at completion, taking into account the price, the deposit and any split payments (such as rent or service charge).
Completion: This occurs when the solicitors (or legal representatives) from both sides complete the transaction on behalf of the buyer and the seller. All documents, money etc are handed over and it is at this point that the purchaser becomes the legal owner of the property.
Conditions of Sale: The detailed standard terms which govern the rights and duties of the buyer and the seller of the property as laid down in the contract that they sign. These are usually 'The Standard Conditions of Sale'.
Consideration: A legal term used in connection with the exchange of something of value that forms a legal and binding contract. For the purpose of house purchase, a consideration is taken to mean the money the buyer pays in exchange for the freehold or leasehold of the property for sale.
Contract: This is a legally binding, written document of agreement between two parties, approved by the solicitors or legal representatives on both sides and sets out the agreed terms by which both sides are committed to proceed to completion.
Conveyance Plan (or Deed Plan): This is the plan that identifies the land being sold through the transfer of ownership.
Conveyance: This is either taken to mean the act of transferring ownership of a property or alternatively the legal document that affects the transfer.
Conveyancer: A licensed conveyancer does the same work as a solicitor on a house sale or purchase.
Covenant: A legal requirement incorporated in the conveyance requiring either seller or buyer to do or not to do something in relation to the property.
Curtilage: Strictly, the piece of ground attached to a house but normally taken to be the land within the boundaries of the property.
Deed of Conditions: In the interest of the amenity of the development and well being of all the residents, Strathclyde Homes require you to agree to the 'Deed of Conditions'. Please pay particular attention to the areas covered: Amenity Areas, Service Verges, Sight Lines and Factors Role. A legal advisor can explain the various clauses in the deed to clarify any of the points.
Deeds (or Title Deeds): All the legal documents relating to the property for as long as the property has existed.
Deposit: A deposit is paid by the purchaser on conclusion of missives and may be a fixed amount or a percentage of the purchase price.
Disposition: A deed which transfers the ownership of a freehold or existing leasehold property, the title of which is registered at the Land Registry or recorded in the Sasine Register.
Engrossment: The clean copy of a deed or document that is to be signed.
Entry Date: Prior to completion of your home, Strathclyde Homes will confirm the proposed NHBC final date for your property. This is the date that your house is passed as complete by the NHBC. Entry usually takes place within 14 days thereafter. At the same time, Strathclyde Homes also inform your legal advisor so they may also make preparations.
Frontage: The front boundary of any property.
Indemnity or Mortgage Guarantee Premium: This provides for a maximum advance without additional security. Any excess that a lender is willing to advance will need to be secured by an indemnity policy. A single premium is payable by the applicant when the mortgage is taken out.
Land Registry of Scotland: An agency with offices in Glasgow and Edinburgh responsible for opening, maintaining and amending the registers of all properties in Scotland. The land registry fees, to register your ownership of the property, are fixed by the Government and are paid through your solicitor.
Legal Costs: These are fees payable to the seller's and buyer's solicitors in connection with the selling or purchase of a property. Costs will include the solicitor's fees, Land Registry fee, search fee and stamp duty. The purchaser also pays the mortgagee's solicitor's fee.
Local Searches: The buyer's solicitor will ask the local authority to supply any information which may affect the resale of the property, for example, plans for new roads or restrictions.
Mains Services: The general term used to cover the connection to the property of drainage, water, gas and electricity.
Management Company (or Factoring Company): A company formed to manage a block of apartments or development of houses, responsible for the maintenance and insurance of the communal areas, where applicable.
Missives: An exchange of letters containing terms and conditions of the sale. Once all terms and conditions have been agreed, the missives are concluded.
Mortgage Protection: This is a special insurance policy which is taken out by the policy mortgagor for the period of a mortgage repayment to cover the eventuality of the mortgagor dying before the repayment term is complete. Insurance may also be available to protect your repayments in the event of job redundancy.
Mortgage Valuation: A report by the mortgagee to decide how much to lend on the security of the property and on what terms.
Mortgage: A legal charge on a property pledging it as security for a loan.
Mortgagee: The person or association (normally a building society) who grants the loan.
Mortgagor: The person borrowing the money and pledging the property as a security. It should be noted that the property is only pledged the mortgagor remains the legal owner of the property.
National House Building Council (NHBC): This is a non-profit making, independent body, approved by the Department of the Environment, which lays down standards for house builders who are registered with it. There is no compulsion for house builders to register with the NHBC but those who do are expected to maintain certain standards and are disciplined by the Council should these standards fall. The NHBC issues ten-year certificates that allow for the remedying of any serious structural defects that have developed during that time. The certificate is issued in respect of a building and automatically passes to the person who owns the house at any time during the ten years. It is most unusual for any lender to grant a mortgage on a new property without this certificate.
Options: When requested at an early stage of construction, Strathclyde Homes can provide variations to your home and should you require any special needs, Strathclyde Homes can provide repositioned light switches and electrical sockets, specially adapted bathrooms and kitchens and access ramps (where site levels permit). Any variations should be discussed with the Sales Consultant, who will advise you of the date you need to submit any requests. If the house is at an advanced stage of construction, such changes may not be possible. All variations and colour choices (if applicable) must be selected within 7 days of conclusion of missives.
Property Enquiry Certificate: One of a solicitor's duties when acting on behalf of a buyer is to establish all the facts pertaining to that particular property and its locality. A questionnaire - known as a Property Enquiry Certificate - is sent to the council authority, completed and returned by them to the solicitor.
Purchaser / Buyer: The person who buys the property.
Registered Title: A title registered at the Land Registry (England & Wales) or at the Land Registry of Scotland to ensure absolute occurrence and ease of transfer in the future.
Reservation Form: This document is completed at the time of reserving a new Strathclyde Home by the Sales Consultant and is signed by the buyer(s). This is a 'subject to conclusion of missives' agreement that means Strathclyde Homes will hold the property for you for 14 days at an agreed price, subject to the special conditions being met.
Right of Way: A general right of way is a public right to use a road, bridleway or path. It may cross private land, for example a public footpath across a field. A specific right of way is an easement over an owner's land, usually referred to in the deeds, whereby named people or categories have right of passage i.e. the right of access to or from their garage over a part of their neighbour's land. It can also refer to a shared driveway which would be a mutual easement affecting both neighbours.
Road Construction Consent: An agreement between builder and the Highway Authority, covering the construction of new roads and eventually the Highway Authority taking over responsibility for maintaining them. This agreement is usually supported by a guarantee or bond from an insurance company or bank.
Service Charge: Where an apartment, for example, is one of a block, there are parts of the building used by all or many of the other occupants. In such cases, it is usual for either the managing agent or for a company set up by all the tenants to levy a charge for the maintenance of these common areas such as cleaning and lighting of staircases, maintaining the communal gardens etc.
Sinking Fund (or Float): Each apartment owner will contribute to a sinking fund for his or her block. This is a sum of money set aside for major repairs and renovation. This sum of money may be refunded should the owner sell on.
Snagging: The process of checking a new home for minor faults.
Solicitor's Letter of Obligation: A letter signed by a solicitor in which he/she personally guarantees something, such as that his/her client's mortgage will be paid off. It is his/her professional duty to honour such an undertaking, even though he/she may suffer financially as a result if the client defaults.
Stamp Duty: This is a government levy, payable by the purchaser of the property. When the stamp duty has been paid off, an official embossed stamp will be placed on the document of sale. Payment is based on the purchase price of the property. Stamp duty is also levied on some mortgage deeds and some insurance policies.
Subject to Contract: A far-reaching term generally meaning that none of the negotiations for sale or purchase of a property shall be binding on either party until the contract is fully signed and therefore concluded.
Title: The legal document describing the property, containing all rights and liabilities that attach to the property.
Vacant Possession: This indicates that the property will be unoccupied when the buyer is ready to take up residence.
Valuation Survey: Prior to making a mortgage offer, your lender will have the property valued for mortgage purposes. Many lenders will allow you to see the report. The value they put on the property is only a reflection of the price the house would fetch in the event of a forced sale and is not an indication of whether the price is a good market price under normal circumstances. A small fee is paid for this, which is variable, on the purchase of the property.
Valuation: An opinion (based on experience), judgement and knowledge of the market value of a property in certain circumstances. Valuations for sale, mortgage, probate, capital gains tax or insurance can all be very different for the same property and fees vary accordingly.
Vendor/Seller: The person who is selling the property.
Wayleave/Servitude: This is used for rights of way, drainage rights, rights for cables and pipes etc.