Conveyancing Glossary: Legal Terms Explained

Whether you’re buying a property or selling, conveyancing can be a complicated process – especially if you’re not familiar with the legal terminology.

In this guide, we’ve put together some of the most commonly used conveyancing terms and provided a brief explainer of each one.

Breach of contract

If you pull out of a house purchase after contracts have been exchanged, it will be classed as a breach of contract. This means the other party could seek damages from you to cover any losses, such as the costs associated with re-marketing their property.

Caveat Emptor

In simple terms, this translates as ‘buyer beware’. It’s a term used to warn buyers that they will be responsible for finding out about the property’s condition, rather than having the seller inform them of any potential problems.

Chain

This refers to the amount of people who are involved in a house purchase and/or sale. The longer the chain, the more likely it is that there will be delays or complications. For instance, you could find yourself in limbo if the buyers of your home are struggling to sell their own property, or vice versa.

Disbursements

These are fixed costs paid to third parties during the conveyancing process. They will usually cover things like local authority searches and Land Registry fees. You’ll pay your solicitor or conveyancer for each disbursement, and they will then pay the relevant third party.

Equity

Equity is the difference between your home’s value and what you owe on the mortgage. It essentially refers to how much of the property you own outright.

Exchange of contracts

This is when contracts will be signed and exchanged between both parties’ solicitors. Once you exchange contracts, you’ll no longer be able to pull out of the transaction without facing financial penalties. You’ll also lose all the money you’ve already spent on conveyancing fees.

Freehold

A freehold property is one that you own completely. There is no ground rent or maintenance fee to pay and there will be no limit on the number of years you can own the property for (as there often is with leasehold homes).

Gazanging

This is when a seller pulls out of an agreed transaction at a late stage, assuming they can get more for the property if they put it back on the market. Gazanging is more likely to happen when the market is hot and property prices are high.

Gazumping

Gazumping happens when another buyer comes along and offers a higher price for a property that already has a potential buyer. This can happen at any stage of the conveyancing process, so the initial buyer may have already paid out for property searches and other associated costs.

Gazundering

This is the opposite of gazumping. It happens when a buyer reduces their offer at the last minute, leaving a seller stuck between accepting a lower offer than agreed or pulling out of the sale completely and losing the money they’ve already spent on conveyancing.

Homebuyer report

This is a type of home survey that is more comprehensive than a basic valuation, but less so than a full structural survey. It is usually only advisable for standard houses that are in generally good condition.

Joint tenants

This is just one of the ways in which you can own a property with someone else. Each tenant will have an equal right to the whole property, which means that ownership will automatically pass to the surviving tenant if one of you passes away.

Land Registry

HM Land Registry is a government department that registers the ownership of property and land in England and Wales. When you buy a home, it will be your solicitor or conveyancer’s duty to register you as the new owner with the Land Registry.

Leasehold

A leasehold property is one where the owner is also a tenant. They will have the right to live in the property for a certain period of time, and they are usually required to pay ground rent to the freeholder – typically a property developer.

Negative equity

If your home is in negative equity, you’ve borrowed more on your mortgage than it’s worth. For example, if you owe £120,000 on your home but it’s worth £110,000, you are in £10,000 negative equity.

Taking out a second mortgage can also contribute to negative equity, so it’s important to think carefully before going down this route.

Occupier’s consent form

Any adult who lives in your property but is not named on the mortgage is known as an occupier.

An occupier’s consent form may be necessary to prove to your lender that the occupier will not have any legal interest in the property, and that the lender will receive a vacant property in the event of repossession.

Off plan

Buying a home off plan means you are buying it before it has been built. You will usually just have the developer’s plan to base your decision off. It can be a risky option and tends to be more common in the buy to let market.

OIEO

‘Offers in excess of’ is a common term used when referring to the asking price of a property. It’s often used in the hopes that a buyer will make a higher offer than the suggested price – but this doesn’t always happen. Buyers could even make a lower offer if they wanted to.

Redemption settlement

This is the amount of money you’ll need to transfer to your mortgage provider if you want to pay your home loan back early. It will usually include the outstanding lump sum you still owe, as well as a penalty fee, if applicable.

Reparations

Whoever is responsible for a breach of contract during the conveyancing process will need to pay reparations to the other party. This will usually cover their conveyancing fees and any other compensation agreed.

Restrictive covenant

A restrictive covenant is a restriction on a property that prevents the new owner from doing certain things to it. This could include prohibiting any business activity on the premises, or not allowing certain alterations to the property.

SSTC

‘Sold subject to contract’ means that the seller of a property you’re looking at has agreed to sell it to someone but is still waiting for contracts to be exchanged. Making an offer at this stage is allowed, but it would be considered gazumping.

Stamp Duty Land Tax

In England, you’ll be required to pay Stamp Duty if you buy a residential property that is worth more than £250,000 (£425,000 for first-time buyers). If the property is non-residential, the threshold decreases to £150,000.

Subsidence

One of the most feared discoveries in a home survey, subsidence is when the foundations of a property sink. It results in a strain on the structural integrity of the property, usually causing cracks to appear in the walls.

Tenants in common

Unlike joint tenants who have equal rights to an entire property, tenants in common each own a specific share. If one tenant dies, their share will not automatically go to the surviving tenants. Instead, it will go to whoever is named in their Will.

Transfer of equity

A transfer of equity adds or removes one or more people from the legal title or ownership of a property. It’s most commonly carried out when a couple separates or a homeowner wants to add a partner to the title deeds.

Wayleave agreement

This is a formal agreement between a property owner and service provider (usually an electricity or telecommunications company) where access is granted for the company to install or maintain cables on or around the property.

How a conveyancing solicitor can help

While it is useful to have your own understanding of conveyancing terminology, a good solicitor should be there to answer any questions you may have throughout the process of buying or selling a property.

To find out how we could match you with a legal expert, get in touch or start your enquiry online.