fbpx

Real Estate Glossary

ADOPTED – A road or sewer system becomes “adopted” when responsibility passes to the highway authority (typically under a Section 38 Agreement - see the separate definition of that term) or sewer undertaker (typically under a Section 104 Agreement - see the separate definition of that term)

ASSENT - A formal document required to transfer ownership of property to the beneficiary entitled to the property following the death of the owner.

ATTORNEY – A person appointed formally to act on behalf of another either generally or for a specific purpose.

BUILDING REGULATION CONSENT- Approval by the local authority on the design, structure and materials used in building work. This is not the same as planning permission.

CALL OPTION – See 'Option'

COMPLETION - The point at which a transaction is finalised, with money and ownership changing hands (Contrast Exchange - see the separate definition of that term).

COMPLETION STATEMENT- A calculation of all the receipts and payments due in respect of a property transaction.

CONTAMINATED LAND - Land affected by contamination which could arise from a past use of a property (e.g. land fill) or by things stored on the property in the past (e.g. oil tanks).

CONTRACT – A legal agreement prepared for signature by the seller and buyer (who will usually each sign different copies) setting out all the legal rights and obligations agreed between them when a property changes hands

CONTRACTED OUT – A commercial lease where the parties have agreed that security of tenure will not apply

CONVEYANCE – A deed by which ownership of unregistered land is or was transferred.  (Contrast Transfer Deed - see the separate definition of that term)

COVENANT - A legally binding promise to do something (a positive covenant) or not to do something (a restrictive covenant)

CPSE - A common standard form of Preliminary Enquiries (see the separate definition of that term) used in commercial property transactions

DEDUCTION OF TITLE – The process by which the seller’s solicitor demonstrates that the seller has the legal right to sell the land (usually by producing copies of their deeds)

DETAILED PLANNING PERMISSION - See the separate definition of Full/Detailed Planning Permission on this page

DIVERSION ORDER - An order by the relevant authority permitting the diversion of the route of a public right of way (Contrast Stopping Up Order - see the separate definition of that term)

DISBURSEMENTS - Payments made or anticipated to be on your behalf e.g. search fees or Land Registry fees

DRAFT - A preliminary version of a document prepared for discussion or negotiation (Contrast Engrossment - see the separate definition of that term)

DUE DILIGENCE – The process by which a buyer of land, investigates the land to support its value and find out whether there are matters on which it requires further information or which it should use as a platform to renegotiate the price

EASEMENT - A right (such as a right of way) that belongs to land (and is not just personal to an individual)

ENGROSSMENT - The top copy of a deed or other document ready for signature. (Contrast Draft - see the separate definition of that term)

ENQUIRIES BEFORE CONTRACT - See the separate definition for Preliminary Enquiries on this page

EPITOME (or EPITOME OF TITLE) – A copy of the title deeds necessary to prove that the seller owns the land he is selling if the property is not registered at the Land Registry

EXCHANGE (or EXCHANGE OF CONTRACTS) - The point at which the parties become committed to a transaction (typically by exchanging signed and dated parts of a contract) (Contrast Completion - see details on this page)

FLYING FREEHOLD - This arises when part of one property is built on top of part of another property and so the upper property owner does not own the building or land underneath the "flying" part. Consequently the lower property is known as the "creeping" part.

FREEHOLD – For all practical purposes, freehold title denotes absolute/outright ownership (Contrast Leasehold; see alsoTitle - see the separate definitions of those terms)

FULL/DETAILED PLANNING PERMISSION - A grant of planning permission authorising development subject to the satisfaction or any conditions set out in it (Contrast Outline Planning Permission - see the separate definition of that term)

LANDLORD - The person who owns the superior title and is entitled to the rent under the lease and possession of the property at the end of the lease term. This is usually the freehold owner.

LAND REGISTRY - A Government organisation responsible for maintenance of a register of properties and their ownership in England and Wales

LEASE - Where a property is leasehold this is the document giving the tenant the rights to possession of the property for the lease term and setting out all the rights and obligations of landlord, tenant and with flats/apartments, sometimes a management company

LEASEHOLD – Where the ownership of property is for a limited period only. For example for a commercial lease of a shop or industrial unit 10 years but often 99 years or sometimes 999 years typically in apartment schemes (Contrast Freehold see also Title- see the separate definitions of those terms)

LEGAL CHARGE – Also known as a mortgage is a loan to buy a house or flat where the mortgagee lends the mortgagor money in return for a legal charge being registered against the property to ensure that the loan must be repaid before the property can be sold

OPTION – An agreement under which one party is granted the right (but not the obligation) to buy property on specified terms within a specified time (sometimes referred to as a “Call Option”; contrast  “Put Option” and see also “Put and Call Option”)

OUTLINE PLANNING PERMISSION - A grant of planning permission authorising a development subject to subsequent approval of various reserved matters (Contrast Full/Detailed Planning Permission - see the separate definition of that term)

OVERAGE PAYMENT – A payment made in addition to the purchase price - for example, a percentage of the amount by which aggregate sale proceeds of the dwellings exceed an agreed threshold

POSITIVE COVENANT - See the separate definition for Covenant on this page

PRE-EMPTION – An Agreement under which one party is given the right to buy property on specified terms within a specified time if the owner decides to sell it, but without any obligation on the owner to do so (sometimes loosely referred to as a “right of first refusal”)

PRELIMINARY ENQUIRIES - A set of enquiries sent to the seller’s solicitor by the buyer’s solicitor, for the seller’s response on issues such as disputes affecting the property

PRIVATE RIGHT OF WAY - A right of way that benefits one or more individual, but not the public at large (Contrast Public Right of Way - see the separate definition of that term)

PUBLIC RIGHT OF WAY - A right of way that benefits the public at large (Contrast Private Right of Way - see the separate definition of that term)

PUT OPTION - An agreement under which the seller is granted the right to require the buyer to buy property on specified terms within a specified time (contrast “Call Option” and see also “Put and Call Option”)

PUT AND CALL OPTION - An agreement under which the seller is granted the right to require the buyer to buy property on specified terms within a specified time and the buyer is likewise granted the right to require the seller to sell it (typically used as a means to delay the date of exchange of contacts for tax purposes)

REGISTERED LAND - Property which has already been registered at the Land Registry

REQUISITION - This expression has two meanings.  One meaning is as in Sewer Requisition (see the separate definition of that term).  The other definition refers to title, where a requisition is a formal enquiry that needs answering as part of the Deduction of Title (see the separate definition of that term)

RESERVED MATTERS - The matters specified in an outline planning permission that require subsequent approval

RESTRICTIVE COVENANT - See the separate definition of  Covenant on this page

SEARCHES - A set of enquiries sent to different authorities (such as the Environment Agency or the Local Authority) relating to matters affecting the property

SECURITY OF TENURE – Usually a commercial lease is within the security of tenure provisions of the Landlord and Tenant Act 1954.  This means that it is possible that the tenant can remain in the Property indefinitely after the end of the term of the lease.  The Tenant can apply for a renewal of the Lease but note that the Landlord can re-possess the property on a certain number of restricted grounds for re-possession such as an intention to redevelop the property.

SERVICE CHARGE - In connection with leasehold properties on-going payments required by a Landlord to cover the costs of maintaining and running the building of which the property forms part or a development including keeping the structure of the building and the common areas/shared facilities in a reasonable state and condition and insuring the building.

SECTION 38 AGREEMENT – For the adoption of new highways under Section 38 of the Highways Act 1980

SECTION 41 AGREEMENT – For the requisition of a new water supply under Section 41 of the Water Industry Act 1991

SECTION 62 AGREEMENT – For a (limited) range of off-site highway works under Section 62 of the Highways Act 1980 (see also the separate definition of Section 278 Agreement

SECTION 98 AGREEMENT – For the requisition of a new sewer under Section 98 of the Water Industry Act 1991

SECTION 104 AGREEMENT – For the adoption of new sewers under Section 104 of the Water Industry Act 1991

SECTION 106 AGREEMENT – A planning agreement under Section 106 of the Town and Country Planning Act 1990

SECTION 185 AGREEMENT – For the diversion of a public sewer under Section 185 of the Water Industry Act 1991

SECTION 278 AGREEMENT – For certain types of off-site highway works under Section 278 of the Highways Act 1980 (see also the separate definition of Section 62 Agreement on this page)

SEWER REQUISITION - The process of requiring the sewerage undertaker (drainage authority) to provide new sewers for a site (at the cost of the developer) – see Section 98 of the Water Industry Act 1991

STAMP DUTY LAND TAX – Also known as “SDLT” a tax paid to the government on the purchase of a property or a long lease where a premium is payable over a certain value or if a new commercial lease, It is calculated by reference to the length of the lease and the rent (plus any VAT payable on the rent) and a formula applied. If the lease is for 7 years or more you will need to file an SDLT return with the Inland Revenue even if no actual SDLT is payable.

STOPPING UP ORDER - An order by the relevant Authority to stop up or close a public right of way (Contrast Diversion Order - see the separate definition of that term)

TENANT - In leasehold property ownership the tenant (or lessee) is the person who owns the property for a limited period of time (the lease term) and is required to pay rent to the landlord

TERM - The period for which a lease will run

TITLE – The owner of land and said to have “title” to it – that title may be Freehold or Leasehold (See also Deduction of Title) - see the separate definitions of each of these terms

TRANSFER DEED - A deed by which ownership of registered land is transferred (Contrast Conveyance - see the separate definition of that term)

TREE PRESERVATION ORDER - An order made by the local authority designating a tree or group of trees as protected and requiring the local authority's permission to lop, top or fell them. Often referred to a “TPO”.

UNREGISTERED TITLE - Where the title to a property has not previously been registered at the Land Registry and ownership is proved by the production of a complete chain of title documents showing successive ownership.

WAYLEAVE AGREEMENT - A formal agreement entered into with a property owner to give a service provider (e.g. electricity or telephone company) a right for their pipe or cable to pass through or over their property.

You can find out more about our Real Estate Services here, or you can contact Abigail Mitchell on 01423 869977