Tell your deed from your deposit with our conveyancing jargon buster
As legal professionals it is all too easy for us to fall into the trap of using complex legal terms and phrases when we discuss your conveyancing with you. We do our best to avoid this and to explain matters to you succinctly and clearly. We want you to understand how your property transaction is progressing throughout. To assist with this, we thought we would provide you with a handy glossary to some of the key words and phrases for those occasions when we do use a technical phrase you may not understand.
Where better to start. Conveyancing, in very simple terms, is the word to describe that area of law with is concerned with the acquisition and transfer of property and rights in property.
In the context of conveyancing there are two possible meanings to this word. One is the equivalent of ownership of land and rights in it, i.e. to have title to land is to have ownership of it. The other is the proof of such ownership, i.e. the evidence such as documents like title deeds which establish the ownership of the land.
Up until the contract is signed either party can choose to walk away. The agreement becomes binding when the purchaser signs the contract (also known as the offer to purchase) and it is sent to the vendor’s solicitor for the vendor to sign. The vendor signs it then a copy is returned to the purchaser’s solicitor. It is deemed to be binding when it is received by the purchaser’s solicitor. It is common for this to take place close to completion.
This is the date when money is transferred from the purchaser’s solicitor to the vendor’s solicitor and the purchaser gets into their new home. It is not the end of the work for the solicitor as the transaction will have to be registered.
Freehold/Leasehold/Fee Farm Grant
If you own a freehold interest in your land then you have effectively absolute ownership of the land. It has the potential to last forever.
If you have a leasehold interest then ultimately the land will revert to the freeholder however it is typically for leasehold interest to last up to 10,000 years here in Northern Ireland so it is unlikely the freeholder will be getting the land back any time soon. You will have to observe covenants and pay a ground rent to the freeholder.
A fee farm grant is like a hybrid of the other two interests. It lasts forever but there is a rent to pay. However this rent is usually a nominal rent which is not collected.
There are two land registration systems in Northern Ireland. The land registration system records the ownership of land and the Land Registry is the office that administers this system. Since 2003 whenever any property in Northern Ireland is transferred for value there is a compulsory obligation to register the property with the Land Registry if it has not already been done so. This has helped to increase transparency and certainty in the ownership of land here.
Registry of Deeds
This is the second land registration system here. This system records the existence and priority of deeds and the Registry of Deeds is the office that looks after this. The move to the Land Registry system, as noted above, has made conveyancing a much easier and more certain process.
This is the document that will be used to register the transfer of ownership from vendor to purchaser. If the property is registered in the Registry of Deeds a deed is drafted by the purchaser’s solicitor and signed by the vendor. If the property is registered in the Land Registry then a prescribed form – “transfer” – is used. The signed, or “executed”, deed/transfer is provided to the purchaser’s solicitor after completion to allow registration to take place.
A covenant is a “promise” contained in a deed which regulates the behaviour of those people that have interests in land. These are usually more commonly found in leasehold estates but as more and more new developments are created with freehold estates they are increasingly relevant to freeholders. Examples include the restriction on making alterations to building on the land, the requirement to pay rent and rates and often matters that could be seen as trivial – such as a prohibition on playing musical instruments between 11pm and 8am. Your solicitor will advise you prior to your purchase as to what covenants are relevant to your new property.
Most people tend of think of the deposit as the difference between what the mortgage company is providing them with and the purchase price. However what the deposit really means in the conveyancing process is a sum of money paid by the purchaser to the vendor at the point where the parties enter into contract (usually 10% of the purchase price). Deposits have become less and less common and are usually only encountered in transactions involving new build properties and auction sales.
Fixtures and Fittings
Fixtures have traditionally been regarded as those things that would require considerable effort, probably tools and skill to remove. Fittings are generally regarded as things that can be un-hooked, un-plugged, lifted or removed without great effort, tools or specialised knowledge. If you are selling your property, your solicitor will provide you with a fixtures and fittings list to complete so that the purchaser knows what you intend to leave and what you intend to remove.
You will have heard the phrase “searches” in relation to conveyancing. These can encompass a wide variety of matters. Bankruptcy and Enforcement of Judgment Office searches will be required against the vendor/s to ensure there is nothing noted which would preclude the vendor from selling the property. If the property is registered in the Registry of Deeds then a search is required to ensure no document has been lodged which would gain priority over the would-be buyer. If the property is registered in the Land Registry then a similar search would be required. If the property is in the Registry of Deeds then a map search of the area to which the property relates is required to ensure some or all of that land has not already been registered in the Land Registry. The vendor will also be obliged to produce a Statutory Charges Register search which will indicate whether the property is affected in any way by statutory restrictions which are not noted elsewhere.
The vendor will provide two property certificates prior to completion. One will be obtained from the local council and will indicate a number of matters including any licensing or building control matters affecting the property. The other – regional property certificate – collates information from the Roads Service, NI Water, the Planning Office, etc relating to the property and takes a little longer to be produced.
This is a loan secured against your property. If the borrower doesn’t make the repayments in respect of the loan then the lender can apply to the High Court for a Possession Order so that they can sell the property and recoup their money.
If you own a leasehold interest in land there will be a ground rent. This is paid to the freeholder of the land (or an agent that collects it on their behalf). Ground rents are usually quite small (indeed some are nominal and not collected). The vendor is required to discharge the ground rent balance prior to the sale of the property.
We hope this brief guide helps you understand the process a little better. If there are any terms that you have heard and you are still not sure of the meaning please contact us on 02891 817715 or contact our property team by email at email@example.com.