Your A-Z of Conveyancing

Bankruptcy Search Fee

If you are borrowing money for a purchase, your lender will want assurance that you have not been made, or are not about to be made, bankrupt.

Bank Transfer Fee

This is the fee charged when paying off an existing mortgage or sending funds through to the sellers solicitors when purchasing a property. You may also be charged this if balance funds are to be forwarded to you following a sale.

Building Insurance

You are responsible for the building’s insurance from the moment you exchange contracts and your building insurance must cover the cost of rebuilding the property, not just the purchase price. If your property is a mid terrace, then it will cost more for the rebuild as opposed to a detached house, as you have to take into consideration the damage that may be caused to the properties either side of you. The re-build cost will normally be quoted on the valuation report issued by your mortgage lender.

Your building acts as a security against your mortgage, although contents insurance is a matter of personal choice. The only exception when placing buildings insurance on risk is when buying a new build property direct from a builder. The buildings insurance must then be placed on risk from completion, as the builder is responsible up until that date.

Chancel Liability Search fee

If you are buying a property near a church or on land formerly owned by some of the older universities, it is possible that you may become liable to contribute towards the cost of repairs to the chancel of the local parish church. A Chancel Liability Search Fee will establish whether or not you will face potential liability before you make the purchase.

Client Care Letter

You will be presented with a full written description and breakdown of costs for the service you are being provided with. This is known as the Client Care Letter and you become committed to the conveyancer once you have signed and returned this letter.

Completion Date

Whether you are the buyer or the seller, you will agree a specific day when ownership of the property is to be transferred. This is known as the Completion Date and is not guaranteed until contracts have been exchanged. On the Completion Date, the seller receives the full payment from the buyer, and must hand over the keys and vacate the property. We cannot specify a time as to when monies will be received by the sellers solicitors, as we are in the hands of the bank system and how quickly a payment is transmitted by them.

Completion Statement

Your Completion Statement shows the financial breakdown of your transaction and will either specify an amount owed to you on completion of your sale or an amount due to your conveyancer prior to completion.

Contract

The legal agreement concerning the sale and purchase of the property or properties. It sets out all the necessary terms and conditions.

Contract Pack

When you are selling a property, your buyer’s conveyancing solicitor will want to investigate your legal title over the property. A Contract Pack will need to be forwarded to them, containing the draft contract, title deeds, property information form, fixtures and fittings form. In some circumstances, a leasehold management information is included. A Contract Pack will always contain building guarantees and any planning consents you have been granted.

Conveyancing

The legal process of transferring ownership of property from one person to another is known as Conveyancing.

Deposit

This is usually around 10% of the full purchase price and is payable to the seller when the contracts are exchanged.

Disbursements

Your solicitor will need to pay others on your behalf during the course of the transaction i.e. search providers and these expenses are known as ‘disbursements’, payable by you once your sale or purchase has completed. You will normally be asked to provide an ‘on account’ payment for search fees at the start of your transaction.

Environmental Search Fee

This type of search will be carried out if there are concerns over environmental issues such as subsidence, flooding or industrial contamination.

Exchange of Contracts

The sale is confirmed on the day when the contracts legally binding the buyer and the seller are swapped by the solicitors. If either party wants to turn back after exchange of contracts then compensation would be payable to the other and if you are the buyer, you would lose the deposit paid on exchange of Contracts.

Fixture & Fittings Form

This clarifies exactly what countenance or other items in the property you are paying for if you are the buyer. If you are the seller, you must ensure that what you are saying you are going to leave, you do leave as this forms a part of the contract.

Freehold / Leasehold

Freehold is the more common type of property and means full ownership. Leasehold means the property is held on a lease and such transactions are usually more complex involving more work. In addition, a Leasehold often involves a management company. This means that extra fees such as notice fees will be payable when buying one of these types of property. You must also take into consideration that you will no doubt pay service charge and ground rent in addition to all your other outgoings.

H.M. Land Registry

The central governing body that records the ownership of land & property throughout England & Wales.

Land Registry Document Fee

Authenticated copies of your title from the Land Registry.

Land Registration Fee

Once your purchase is complete your solicitor has to register you as owners of the property including any mortgage charge. These details are registered at the Land Registry who will charge a fee, payable by you.

Land Registry Office Copies

The official copy, accepted in a Court of Law, of your property’s record held by H.M. Land Registry, which usually consists of a Property Register and Title Plan.

Land Registry Search Fee

This fee is payable to cover the priority search of the title register. After the exchange of contracts, it is vital that the register is checked to make sure that it has not changed – i.e. that the property still belongs to the seller – and to ensure that the buyer has priority over any other application to change the register for a period of 30 working days.

Leasehold Property Information Form

The leasehold equivalent of SPIF, explained later.

Legal Fees (or Solicitor Fees)

This is what your solicitor charges you for the conveyancing of the property.

Local Authority Search Fee

Your conveyancer will check with the local council to see if anything of significance has been recorded against the house. These could be Planning Permissions, Road Proposals, Tree Preservation Orders, Compulsory Purchase Orders and Highway adoption for example but do not include any current planning applications. They do this using many probing questions and this work is sometimes contracted out to a third party search company so the fees can vary significantly.

Mortgage Fees – Purchase

If you are relying on a mortgage to buy the property, the lender will normally request things from your solicitor as well, which will incur extra costs.

Mortgage Fees – Sale

If you have an outstanding mortgage on the property you are selling, your solicitor will be required to pay the lender the money due, and they will cancel the registration of the mortgage against your property.

Pre-Completion Searches (when buying):

Your lender needs to know that you haven’t become bankrupt since their initial mortgage offer was made, and you need to know that the person you are about to pay for the property is still the legal owner.

Property Information Form (SPIF)

The vendor fills this in to fulfil a legal obligation to inform the buyer about issues such as boundaries, guarantees, occupiers, planning and anything else that could have repercussions for the new owners of the property.

Redemption Settlement

This is the amount charged by an existing lender to settle your account. Depending on your mortgage product and term, you may be liable for an early redemption fee and his will be added to the statement by your lender.

SDLT Completion Fee

When the purchase is complete, a Stamp Duty Land Tax return form has to be submitted to HM Revenue & Customs along with a Stamp Duty payment. Your conveyancer will usually charge a fee for completing this form.

Stamp Duty Land Tax (SDLT)

This is a tax payable to the government calculated on the value of the house to be purchased.

Survey

A detailed survey can be carried on the property to check for any potential problems, including structural issues such as subsidence. This helps to protect the buyer and is paid for by the buyer.

Title Deeds

This document provides proof of ownership for a property and also spells out any rights or obligations affecting the property.

Transfer Deed

This is the document that will transfer legal ownership of the property.

Valuation

This is carried out by your mortgage lender, if you are obtaining mortgage finance. This is for their lending purposes only and to ensure that the property is worth the amount of money that they are to lend to you.

Water & Drainage Search

Your solicitor will check that the property you are buying is connected to public drains, for example.

We trust you have found this glossary of terms useful however there is no substitute for solid legal advice from trained professional. If you would like further advice or just want to speak to somebody, give us a call on 0113 2285306 or send an email to victoria@hallamsolicitors.co.uk

21 Otley Road Headingley
Leeds
LS6 3AA