conveyancing law solicitors

Boyd Rice Solicitors’ Guide to Conveyancing Terminology

Ben Wall

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.

Conveyancing

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.

Title

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.

The Contract

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.

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.

Land Registry

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.

Deed/Transfer

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.

Covenants

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.

Deposit

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.

Searches

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.

Property Certificates

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.

Mortgage

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.

Ground Rent

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 property@boydricesolicitors.com.

purchasing a house through co-ownership conveyancing law

How to get a deposit for a first home

Ben Wall

Some hints and tips to inspire first time buyers

Ask any aspiring first time buyer what the biggest hurdle to buying their starter home is and they will tell you it is saving up for the deposit. The average deposit need for a first-time buyer house in Northern Ireland is an eye-watering £30,435. With property prices on the increase it may seem like the dream of owning your first home is moving ever increasingly out of reach. Helpfully we have decided to provide you with some tips that may help make that dream a reality.

Move back in with the parents

Housing rents are far in excess of monthly mortgage repayments right now. Every pound you give to your landlord is a pound less saved towards your deposit. It makes perfect sense then to move back home and put what you would have spent on rent into the bank at the end of each month. The average rent here is £629 per month. Over the course of a year that is a not inconsiderable sum of £7,548. In addition you may be able to save on food, utilities, etc.

The Bank of Mum and Dad

Yes this is only available to the privileged and is unfair on those more disadvantaged but the majority of first time buyers are getting gifts to help with the deposit. Your lender will require your parents to sign a gift waiver, often with independent legal advice. One thing to be wary about, if your parents die within seven years of making the gift to you its value may still be counted towards the inheritance tax liability.

Move somewhere else

If you don’t mind a bit of a commute to work you will find that the property values vary wildly in Northern Ireland, as they say, “location, location, location”. Moving from Belfast into the commuter belt or from one county to another can get you similar properties at a fraction of the cost. This will help knock a big chunk off of your deposit.

Get a Help to Buy ISA

Don’t just save, get the government’s help. If you open up one of these ISAs (available at almost all of the high street banks) the government will boost your savings by 25%. The maximum bonus you can get is £3,000 per saver. So if you and your partner are purchasing together you could conceivable get a bonus of £6,000 between you. There is a lot of small print so make sure you take time to apprise yourself of the terms before getting involved.

Buy with Northern Ireland Co-Ownership Housing

This is a not for profit organisation with the sole purpose of making housing more affordable. In very broad terms you buy between 50% and 90% of the home you want and they buy the remaining share. You pay rent on the share that you do not own. You can then buy more shares in your property as the years go by. What this does is vastly decrease the size of the deposit you need (by up to 50%) so it is not to be sniffed at.

If you would like advice in relation to any issue regarding the purchase of a first home please give us a call on 02891 817715 or contact our property team by email at property@boydricesolicitors.com.

New Belfast Office

Ben Wall

We are delighted to announce the opening of our new premises in Belfast

Due to continued expansion of the business we have decided to open a base in Belfast. We strive to put our clients first and the new, convenient office demonstrates how important their needs are to us.

Our new office can be found at Adelaide House, Hawthorne Business Centre, Falcon Road, Belfast BT12 6SJ. Please make an appointment in advance.

Our Belfast office contact number is 02890 387060.

Re-mortgage your house

Reap the Rewards by Overpaying on your Mortgage

Ben Wall

Here’s how to save ten of thousands on your home loan and become mortgage-free years early

Have you ever considered overpaying on your mortgage? If not, there’s two major reasons why you should start giving it serious thought right now. The first is that savings rates are still extremely poor. You’ll be hard pressed to find a safe investment where you can get a decent return. Overpaying on your mortgage will save you tens of thousands, guaranteed. The second is that interest rates are expected to continue to increase over the coming years – increasing repayments. Overpaying will reduce the total you begrudgingly give over to the bank and end your indebtedness years in advance.

Monthly Overpayments or Lump Sum Overpayments?

You can make a lump sum overpayment which will have an immediate effect on the remaining length of your mortgage. For obvious reasons this option is not available to most but those who have come into an inheritance or sold an asset can save enormous amounts of money.

An alternative option is to repay slightly more than required each month on your mortgage. Money Saving Expert have a useful calculator to help you determine how much you can save by regularly overpaying each month. Say, for instance, you have £150,000 left on your mortgage, 25 years to go and an interest rate currently at 4.5%. By paying just £100 per month extra you would save £20,010 in interest repayments and pay off the mortgage nearly four and a half years earlier.

Check the fine print

In you are in a fixed rate period, or an introductory offer then a lot of lenders may only allow you to pay up to 10% of your mortgage balance as an overpayment each year. You really need to check the fine print on your terms and conditions as you don’t want to be liable for penalty fees. These can typically be between 1% and 5% of the overpayment made. Again, you’ll need to check the fine print to check what the exact penalties are.

If you are on a standard variable rate then the vast majority of lenders won’t have any restrictions on the level of overpayments you make. Keep in mind standard variable rates are more expensive so you might be better off getting a re-mortgage and fixing your rate.

Overpayments and Re-mortgages

If you have been overpaying your mortgage consistently and then you go to re-mortgage you may find you get a far better deal than you expected. The reason for this is the deal your lender will give you will depend on your loan-to-value ratio (LTV). This measures the size of the outstanding mortgage compared with the market value of your property. If you purchase a property with a 10% deposit then your LTV is 90%. As you pay off your mortgage your LTV will drop. If you’re overpaying on your mortgage it will drop at an increased rate. Then you can get an even better deal on your re-mortgage.

Make sure you have a contingency fund

It is all well and good making overpayments on your mortgage but what if you were unexpectedly made redundant or you needed to spend significant money on something that you did not anticipate. You would still be obligated to make your mortgage repayments in full each month (although some mortgages allow you to underpay if you have built up some credit). Therefore you should really have some funds saved for emergencies before you start overpaying your mortgage.

If you would like advice in relation to any issues regarding remortgaging your property please give us a call on 02891 817715 or contact our property team by email at property@boydricesolicitors.com.