Jargon buster

111 property and conveyancing terms explained in plain English.

A

Abortive costs: Fees and expenses a law firm may charge if a transaction does not go ahead, for example because a sale or purchase falls through before exchange. The firm's terms of engagement explain what it charges in that situation, and money already paid to others, such as search fees, usually cannot be refunded. Every law firm on the Keyfolio panel, other than a firm you choose instead (your quote page says whether it does too), works on a no completion, no fee basis, so it charges no legal fee for a transaction that does not complete, only the disbursements already paid out (on a sale, unless a second buyer pulls out too): see No completion, no fee.
AML checks: Anti-money laundering checks that law firms, estate agents and other regulated businesses must carry out by law. They confirm who you are and where the money for your transaction comes from, usually through identity documents, electronic checks and bank statements.
Assignment: The transfer of an existing lease from one person to another, so the new tenant takes over the rest of the term. For a commercial lease the landlord's consent is usually needed, given in a document called a licence to assign.
Authorised guarantee agreement (AGA): In commercial property, a guarantee given by a tenant that transfers its lease, promising that the incoming tenant will keep to the lease. A landlord can require one as a condition of consenting to the transfer, and it covers only the immediate incoming tenant.

B

Bankruptcy search: A search of the Land Charges register, kept by HM Land Registry, to check that a buyer or borrower is not bankrupt. Mortgage lenders require one against each borrower before the loan is released.
Break clause: A term in a lease that lets the landlord, the tenant or both end the lease early on a set date or after giving notice. Break clauses often have strict conditions, such as paying all rent due and leaving the premises empty, which must be met exactly.
Bridging loan: A short-term loan used to buy a property quickly, or to cover a gap until a sale or longer-term finance repays it. It usually costs more than a mortgage, and the lender will want a clear plan for repaying it.
Buildings insurance: Insurance that covers the structure of a property against risks such as fire and flood. When you buy a house, your conveyancer will tell you when cover should start, often from exchange of contracts, and your mortgage lender will require it. For a leasehold flat the landlord usually insures the building and recovers the cost through the service charge.

C

Chain: A series of linked sales and purchases that depend on each other, for example where your buyer is selling a home and you are buying another. A delay anywhere in the chain can hold up everyone in it.
Chancel repair liability: An ancient liability, attached to some land, for the owner to pay towards repairing the chancel of a parish church. Since 13 October 2013, a buyer of registered land who pays for it generally takes free of the liability unless it has been protected on the register. Conveyancers still check for it and may suggest insurance.
Charge: A mortgage or other loan secured on a property and recorded on the register at HM Land Registry. If the loan is not repaid, the lender can enforce its security, for example by selling the property.
Client account: A bank account a law firm keeps for clients' money, such as a deposit or the purchase price, separate from its own money. Keyfolio never holds client money; the law firm acting for you does.
Client care letter: The letter, also called terms of engagement, that a law firm sends when you instruct it. It sets out the work it will do, its fees, who is handling your matter and how to complain, and you usually sign and return it before work begins.
Collective enfranchisement: The legal right of flat owners in a building to join together and buy the freehold. Owners of at least half of the flats must take part, the building must meet certain conditions, and the process involves formal notices and a valuation.
Commonhold: A way of owning a flat or other unit freehold, with the owners running the shared parts of the building together through a commonhold association instead of a landlord. It is available in England and Wales but is still rarely used.
Completion: The day the purchase money reaches the seller's conveyancer, ownership passes to the buyer and the keys are released.
Completion statement: A statement from your conveyancer showing all the money needed to complete, or due to you, such as the price, deposit, mortgage, legal fees, disbursements and any tax.
Conservation area: An area the local council has designated for its special architectural or historic interest. Extra planning controls apply there, for example to demolition, some alterations and work on trees, so buyers should check that past work had any consent it needed.
Conveyancing: The legal work involved in transferring ownership of property, or in changing the owners or the mortgage of a property. It is carried out by solicitors, licensed conveyancers and other authorised lawyers.
Covenant: A legally binding promise in a deed or lease, either to do something (a positive covenant, such as maintaining a fence) or not to do something (a restrictive covenant, such as not running a business from the property).
CPSE (Commercial Property Standard Enquiries): A standard set of questions that a buyer's or tenant's conveyancer sends to the seller or landlord about a commercial property before contracts are agreed. They cover matters such as boundaries, services, planning, environmental issues, tenancies and VAT.

D

Declaration of trust: A document that records who owns what share of a property's value and what happens if it is sold or one owner wants to leave. It is often used when co-owners put in different amounts, for example unmarried couples or friends buying together.
Deed of covenant: A deed in which the buyer of a leasehold property promises the landlord or management company to keep to the terms of the lease. Many leases require one on every sale, and the landlord or managing agent usually charges a fee for dealing with it.
Deed of variation: A deed that changes the terms of an existing lease, for example to correct a defective clause that a mortgage lender will not accept. The same name is used for a document that changes who inherits under a will, which is a separate area of law.
Deposit: When buying, the word has two meanings: the money you put towards the price yourself, with the rest coming from a mortgage, and the sum paid when contracts are exchanged, commonly up to 10% of the price. In England and Wales a buyer who fails to complete after exchange can lose the exchange deposit.
Dilapidations: Repairs a commercial tenant must carry out, or pay for, under its lease, usually at the end of the term. Claims can be large, so tenants should understand their repairing obligations before they sign.
Diminishing Musharaka: A form of Islamic home finance in which you and your finance provider buy a home together. You pay rent on the provider's share and buy that share a little at a time, until you own the whole home. In the UK it is often combined with Ijara: see buying with Islamic finance.
Disbursement: A payment your conveyancer makes to someone else on your behalf, such as search fees, HM Land Registry fees or identity check costs. Disbursements are listed separately from the legal fee, and some carry VAT while others do not.
Draft contract: The proposed contract for a sale, prepared by the seller's conveyancer and sent to the buyer's conveyancer with the title documents and property forms. It is checked and negotiated before it is signed and exchanged.

E

Early repayment charge: A fee some mortgage lenders charge if you repay your mortgage, or move to another lender, during a fixed or discounted deal. Your redemption statement shows whether one applies.
Easement: A right over someone else's land, such as a right of way along a shared drive or a right to run drains or cables under a neighbour's land. Easements are usually recorded in the title deeds or on the register.
Energy Performance Certificate (EPC): A certificate rating a property's energy efficiency from A (most efficient) to G, with estimated running costs. Sellers and landlords need one when a property is marketed for sale or to let.
Enquiries: Questions the buyer's conveyancer raises with the seller's conveyancer about the property, its title and anything unclear in the documents. The buyer relies on the replies, so they must be accurate.
Equity release: A way for older homeowners to take money from the value of their home while continuing to live there, usually through a lifetime mortgage or a home reversion plan. The money is normally repaid from the sale of the home when the owner dies or moves into long-term care, and lenders usually require independent legal advice before you commit.
Exchange of contracts: The point where the buyer and seller swap signed contracts, the completion date is fixed and the deal becomes legally binding. In England and Wales the buyer usually pays a deposit at exchange, and pulling out afterwards has serious financial consequences.

F

First-time buyer relief: A reduction in property tax when every buyer is buying their first home to live in. In England and Northern Ireland there is no Stamp Duty Land Tax up to £300,000 and 5% from £300,001 to £500,000, with no relief above £500,000. Wales has none.
Freehold: Outright ownership of a property and the land it stands on, with no time limit. Most houses in England and Wales are freehold, while most flats are leasehold.

G

Gazumping: When a seller who has accepted your offer accepts a higher offer from someone else before contracts are exchanged. It can happen because neither side is bound until exchange.
Gazundering: When a buyer lowers their offer shortly before exchange of contracts, often hoping the seller will accept rather than lose the sale.
Gifted deposit: Money given by a relative or friend towards your deposit, with no expectation that you will pay it back. Lenders and law firms need evidence of where it came from, and the person giving it is usually asked to confirm in writing that it is a gift and not a loan.
Grant of probate: The court document confirming that the executors named in a will have authority to deal with a person's estate, including selling their property. Where there is no will, the equivalent is letters of administration.
Ground rent: A yearly payment a leaseholder makes to the landlord under the lease. Most new long leases of homes in England and Wales granted on or after 30 June 2022 can only require a peppercorn, meaning no ground rent in practice.

H

Heads of terms: A summary of the main points agreed for a commercial property deal or lease, such as the rent, the length of the lease and any break rights. They are not usually legally binding, but they guide the drafting of the formal documents.
Higher rates for additional homes: Extra property tax charged when you buy a home and will own more than one, for example a second home or a buy-to-let. In England and Northern Ireland it adds 5 percentage points to every band of Stamp Duty Land Tax, and Wales has higher rates of Land Transaction Tax. In each of them these extra charges do not apply where the price is under £40,000. If you are replacing your main home, they do not apply if the old one is sold before, or on the same day as, your purchase; otherwise you usually pay them and can reclaim them if you sell it within three years.
HM Land Registry: The government department that keeps the register of land and property ownership in England and Wales. After completion, your conveyancer applies to it to register the new owner and any new mortgage.
Home purchase plan: Islamic home finance, regulated by the Financial Conduct Authority, in which the provider buys the home, or a share of it, and you buy it from the provider over time while paying rent on the part you do not yet own, instead of borrowing at interest. Ijara and Diminishing Musharaka plans work this way.

I

Ijara: A form of Islamic home finance in which the provider buys the home and leases it to you. You pay rent, usually with payments towards buying the home, and it passes to you at the end of the plan.
Indemnity insurance: A one-off insurance policy covering a specific legal risk, such as a missing planning or building regulations consent or the breach of an old restrictive covenant. It protects the owner and lender against financial loss if the risk ever arises, but it does not fix the underlying problem.

J

Joint tenants: A way for two or more people to own a property together in England and Wales where they all own the whole of it, rather than separate shares. If one owner dies, their interest passes automatically to the surviving owners, whatever their will says.

L

Land and Property Services (Northern Ireland): The government agency in Northern Ireland, part of the Department of Finance, that keeps the Land Registry of Northern Ireland, which records ownership of registered land, the Registry of Deeds for land that is not registered, and the Statutory Charges Register. HM Land Registry covers England and Wales only.
Land Transaction Tax (LTT): The tax paid when you buy property or land in Wales, managed by the Welsh Revenue Authority, which replaced Stamp Duty Land Tax there from 1 April 2018. Main residential rates start at 0% up to £225,000 and rise in bands to 12% above £1.5 million, and there is no first-time buyer relief. The return and payment are due within 30 days of the day after completion.
Lease extension: Adding years to an existing lease, either by agreement with the landlord or by using a legal right. Qualifying flat owners can usually add 90 years with no ground rent, and house owners may be able to add 50 years, after serving formal notices and agreeing a price. Changes are being brought in by the Leasehold and Freehold Reform Act 2024.
Leasehold: Ownership of a property for a fixed number of years under a lease granted by the landlord, who owns the freehold. Leaseholders usually pay ground rent and service charges and must keep to the rules in the lease, and most flats in England and Wales are leasehold.
Legal Ombudsman: The independent body that deals with complaints about lawyers in England and Wales, including solicitors and licensed conveyancers. You usually need to complain to the firm first and give it up to eight weeks to respond, and time limits apply.
Legal pack: The documents made available before an auction, such as the title, searches, special conditions of sale and any leases. A successful bid is usually binding, so the legal pack should be reviewed before you bid.
Lender panel: The list of law firms a mortgage lender allows to act for it on a purchase or remortgage. If your conveyancer is not on your lender's panel, the lender may instruct its own solicitor, usually at extra cost to you.
Licence to alter: A landlord's formal written consent for a tenant to make alterations to leased premises, such as structural changes or a new shopfront. It usually sets conditions about how the work is done and whether it must be reversed when the lease ends.
Licence to assign: A landlord's formal written consent for a tenant to transfer its lease to someone else. It may come with conditions, such as the outgoing tenant giving an authorised guarantee agreement.
Licensed conveyancer: A specialist property lawyer regulated by the Council for Licensed Conveyancers and qualified to carry out conveyancing in England and Wales.
Local authority search: A search asking the local council for information affecting a property, such as planning decisions, building control records, roads, tree preservation orders and entries on the local land charges register. It is one of the standard searches on a purchase.
LPE1: A standard leasehold enquiries form that the buyer's conveyancer asks the landlord or managing agent to complete. It covers matters such as service charges, ground rent, insurance, planned works and disputes, and forms the core of the management pack.

M

Management pack: The information a landlord or managing agent provides when a leasehold property is sold, usually including answers to the LPE1 form, service charge accounts and budgets, insurance details and building rules. The landlord or managing agent sets the fee, which the seller normally pays.
Managing agent: A company appointed by a landlord or a residents' management company to run a building or estate, collect service charges and arrange repairs and insurance.
Mortgage offer: A lender's formal written offer of a loan, issued after it has assessed you and valued the property. It sets out the amount, interest rate, conditions and the date by which the loan must be used.
Mortgage redemption: Paying off a mortgage in full, usually from the money from a sale or from a new loan when you remortgage. Your conveyancer pays the lender on completion and arranges for the mortgage to be removed from the register.
Murabaha: A form of Islamic finance in which the provider buys a property and sells it straight on to you at a higher, fixed price that you pay in instalments, instead of charging interest.

N

NHBC: The National House Building Council, which provides Buildmark, a 10-year warranty and insurance for many new and newly converted homes. For the first two years the builder is responsible for putting right defects, and NHBC insurance then covers certain structural problems for the remaining eight years.
No completion, no fee: An arrangement in which a law firm charges no legal fee if a transaction does not complete. Disbursements already paid out for the client, such as search fees, are usually still payable. Every law firm on the Keyfolio panel, other than a firm you choose instead (your quote page says whether it does too), works this way: if your transaction does not complete, you pay only for disbursements already paid out for you, and on a sale whose buyer pulls out, your firm carries on with the next buyer on the same quote, and only if that buyer pulls out too can it charge for the work it has done. How it works explains more.
Notice of assignment: A formal notice telling the landlord of a leasehold property who the new owner is, often given with a notice of charge about the buyer's mortgage. Most leases require it after completion, and the landlord or managing agent usually charges a registration fee.

O

Office copies: The informal name for official copies of the register and title plan from HM Land Registry. They show who owns a property and any mortgages, rights and restrictions affecting it.
Option agreement: An agreement giving someone, often a developer, the right to buy land at a later date, usually once planning permission is granted. The price, how it is worked out and the events that trigger the right need careful drafting.
Option to tax: An election, notified to HMRC, by the owner of a commercial property to charge VAT on its sale or rent, which would otherwise usually be exempt. Once made it normally lasts for many years and is hard to reverse, so buyers and tenants should check whether one is in place.
Overage: An arrangement that lets the seller of land share in a later increase in its value, for example if planning permission is granted after the sale. It is usually secured by a covenant, a restriction on the title or a legal charge.

P

Peppercorn rent: A nominal rent with no real monetary value. A lease that sets the ground rent at a peppercorn means, in practice, that no ground rent is payable.
Priority search (OS1): An official search of the register at HM Land Registry made shortly before completion, using form OS1 for a whole title. It confirms nothing has changed and protects the buyer's or lender's application for registration for 30 working days.
Product transfer: Switching to a new mortgage deal with your existing lender, without changing the owners or moving to a new lender. It does not usually involve any conveyancing.

R

Redemption statement: A statement from your mortgage lender showing exactly how much is needed to pay off the mortgage on a given date, including interest and any early repayment charge.
Referral fee: A payment a law firm makes to a business that introduces a client to it. When Keyfolio introduces you to a law firm, the firm pays Keyfolio out of the fees it charges, so it is not an extra item on your bill, and we tell you the firm's name and what it pays us for your matter before you instruct it.
Rent review: A term in a commercial lease allowing the rent to be reviewed at set intervals, for example every five years. The new rent may be based on the market, on an index such as inflation or on a fixed increase.
Report on title: Your conveyancer's report to you before exchange, explaining what the title, searches, enquiries and contract have shown and anything you need to decide. Read it carefully and ask about anything you do not understand.
Reservation agreement: An agreement a developer uses when you reserve a new build home, taking it off the market for a short period in return for a reservation fee. It usually sets a deadline for exchange of contracts, so check what happens to the fee if you pull out.
Restriction: An entry on the title register at HM Land Registry that limits how the property can be sold or mortgaged. Examples include a requirement for a management company's consent, or one showing that co-owners hold as tenants in common.
Restrictive covenant: A promise, often in an old deed, not to do something on the land, such as building more homes or running a business. Restrictive covenants can bind later owners, so a buyer needs to know about them before committing.
Right to buy: A scheme that lets eligible council tenants in England buy their home at a discount, with some housing association tenants having a similar right. If you sell within five years you may have to repay some or all of the discount. The scheme has ended in Wales.
Right to manage: A legal right for leaseholders of flats to take over the management of their building from the landlord through a company they set up, without having to prove the landlord has done anything wrong.

S

Searches: Enquiries your conveyancer makes of the council, the water company and other organisations about matters affecting a property, such as planning, roads, drainage and environmental risks. A typical purchase includes local authority, water and drainage, and environmental searches, with others depending on the location.
Section 20 notice (service charge consultation): A notice a landlord of residential leasehold property must serve when consulting leaseholders before major works costing any one leaseholder more than £250, or a long-term agreement costing more than £100 a year. If the landlord does not consult properly, it may be limited to recovering those amounts unless a tribunal agrees otherwise.
Section 25 notice: A notice a landlord serves under the Landlord and Tenant Act 1954 to end a business tenancy that has security of tenure. It must be given 6 to 12 months before the end date it names and must say whether the landlord will oppose a new tenancy.
Security of tenure: The right of many business tenants in England and Wales, under the Landlord and Tenant Act 1954, to stay on and ask for a new lease when their lease ends. Landlords and tenants can agree to exclude it before the lease is granted by following a formal procedure.
Separate representation: When a mortgage lender uses its own solicitor instead of the buyer's conveyancer, usually because that conveyancer is not on the lender's panel. The buyer normally pays the lender's solicitor's fees as well.
Service charge: The amount a leaseholder pays towards running a building or estate, such as insurance, cleaning, repairs, lighting and the managing agent's fees. It usually changes each year and may include contributions to a reserve fund for future major works.
Shared ownership: A scheme in which you buy a share of a home, from 10% to 75% of its value in England, and pay rent to the landlord, usually a housing association, on the rest. Shared ownership homes are always leasehold, and you can usually buy more shares later.
Source of funds: Evidence of where the money for your purchase comes from, such as savings, a sale, a gift or an inheritance. Law firms must check it as part of their anti-money laundering duties.
Staircasing: Buying further shares in a shared ownership home, which reduces the rent you pay on the landlord's share. Each step needs a valuation and legal work, and buying all the remaining shares means you own 100% of your home.
Stamp Duty Land Tax (SDLT): The tax paid when you buy property or land in England or Northern Ireland, managed by HMRC. Residential rates start at 0% up to £125,000 and rise in bands to 12% above £1.5 million, with extra charges for additional homes and for buyers who are not UK resident. The return and payment are due within 14 days of completion, and your conveyancer usually deals with both.
Subject to contract: A phrase used during negotiations to show that nothing is legally binding until contracts are exchanged. An agreed sale is described as sold subject to contract (STC) until then.
Surrender: An agreement between a landlord and tenant to end a lease early, so the tenant gives the property back and both are usually released from future obligations. It is normally recorded in a deed.
Survey: An inspection of a property's condition by a surveyor, which can reveal problems such as damp, subsidence or roof defects. RICS Home Surveys come in three levels, from a basic Level 1 report to a detailed Level 3 building survey. A lender's valuation is not a survey.

T

TA10: The Law Society's Fittings and Contents Form, which shows the items a seller is including in the sale, taking away or offering to sell separately, from curtains and light fittings to garden sheds.
TA6: The Law Society's Property Information Form, which a seller completes with details such as boundaries, disputes, alterations, guarantees, services and parking. The buyer relies on the answers, so they must be accurate.
TA7: The Law Society's Leasehold Information Form, which a seller of a leasehold property completes with details such as the landlord, managing agent, service charges, ground rent and any notices received.
Tenants in common: A way for two or more people to own a property together in England and Wales where each owns a defined share, which can be equal or unequal. Each owner's share passes under their will, or under the rules for people who die without one, rather than automatically to the other owners.
Title: The legal ownership of a property and the evidence for it. For registered land, the title is shown on the register and title plan at HM Land Registry, together with any rights, restrictions and mortgages.
Title deeds: The paper documents showing the history of who has owned a property, along with any covenants and rights. For registered land the register is now the main evidence of ownership, but older deeds can still be useful.
TOGC (transfer of a going concern): A VAT rule under which the sale of a business, or of a let commercial property together with its letting business, is not treated as a sale for VAT, so no VAT is charged on the price. Strict conditions apply, for example the buyer must carry on the same kind of business and, where needed, opt to tax and notify HMRC in time.
TR1: The HM Land Registry form used to transfer the whole of a registered property from the seller to the buyer. It is signed before completion and sent to HM Land Registry afterwards with the application to register the buyer.
Transfer of equity: A change to the owners of a property without a sale, for example adding a partner or removing someone after a separation. It needs the lender's consent if there is a mortgage, and tax may be due if the person receiving a share takes on part of the mortgage or pays money.

U

Undertaking: A formal promise by a solicitor or conveyancer that they are professionally bound to keep. A common example is the seller's conveyancer promising to pay off the seller's mortgage from the sale money on completion.
Unregistered land: Land or property whose ownership has never been recorded at HM Land Registry, so it is proved by paper title deeds. A sale, gift or first mortgage normally triggers first registration, which takes extra time and work.

V

Vacant possession: When the seller hands over a property empty of people and their belongings, so the buyer can move straight in. Most home sales complete with vacant possession.
VAT: Value Added Tax, charged at 20% on most professional fees, including a law firm's legal fees, and on some disbursements. HM Land Registry fees and property taxes have no VAT, while VAT on the price of a commercial property depends on the property and on choices such as an option to tax.

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