Jargon Busters

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Some of the professional and technical terms used in the conveyancing process can be confusing particularly for first time purchasers.

Some years ago the Law Society working with "Clarity" (the organisation promoting the use of clear English) went some way to easing the problem by changing the terminology used in the standard conditions of sale contract. Listed below is the guide:-

Advance	The mortgage loan
Bridging loan	Short-term loan enabling the borrower to bridge the gap between the purchase of a new house and the sale of the old house
Collateral	Property pledged as security against the repayment of the loan
Completion	The final legal transfer of ownership of the loan
Contract	The written legal agreement between the seller and the buyer with regard to the property
Conveyancer	The solicitor or legal conveyancer who arranges the legal aspects of selling and buying property
Deeds	The legal documents which entitle the owner to the property
Disbursements	The fees for land registry and local searches which are payable to the conveyancer by the buyer
Equity	The difference between the value of the property and the amount of any loans secured against it
Exchange of contracts	The point where both the buyer and seller are legally bound to the transaction and risk regarding the property passes to the buyer
Freehold	Ownership of the property and land upon which it stands - not usually available for flats
Gazumping	The situation that arises when a Seller accepts a higher offer from another Buyer when he has already accepted an earlier lower offer from a different Buyer. The firsat Buyer is said to be gazumped and then has to decide whether to match that offer increase it, or lose the property.
Gazundering	Similar to gazumping but in reverse. This arises where a Buyer waits until exchange of contracts is imminent and then dramatically reduces the offer.
HIP	Home Information Pack
Ground rent	Annual charge payable by leaseholders to the freeholder
Homebuyers report	Surveyors report on the property - less extensive than a structural survey
Indemnity	Single payment for an insurance policy to cover the value of the property to the lenders - when they lend a high percentage of the purchase price
Land registry fee	A fee payable to the land registry to register the transfer of ownership of the property
Leasehold	Ownership of the property but not the land on which it stands so that when the lease expires ownership of the property reverts to the freeholder
Lessee	The person to whom the lease is granted
Lessor	The person who grants a lease
Mortgage	A loan made against the security of the property
Mortgagee	The person (or organisation - eg bank or building society) lending the mortgage advance
Mortgagor	The borrower to whose property stands as security to the mortgage loan
Principle	The amount of the loan on which interest is calculated
Purchaser	The person buying the property. Now more usually called "The Buyer".
Redemption	The final payment of a mortgage loan
Redemption fee/redemption intere	The charge made by some lenders if a mortgage redemption interest is ended early
Stamp duty	A government tax. The amount payable changes from year to year in line with the Budget. Tax is currently payable on properties over £60,000.00 in value. There is a sliding scale applicable.
Subject to contract	Wording of any agreement before exchange of contracts which allows either party to withdraw without incurring any penalty
Survey	Full inspection of the property by a surveyor, usually on behalf of a buyer
Term	The length of time over which a mortgage loan is to be repaid
Valuation	Inspection of the property to ascertain its acceptability to the lender as security against the mortgage loan, for which the borrower must pay
Vendor	The person selling the property more commonly called "The Seller" now.