Buying a property is an exciting time however it can be stressful too, especially when you are a first-time buyer. The number of factors involved in purchasing your first home can feel overwhelming. To ensure important information is understood, it is important that as a first-time buyer, you are familiar with some of the legal terms used throughout the process.

Conveyancing

The term refers to the legal process of transferring ownership of a property from the seller to the buyer.

Leasehold and Freehold

These terms refer to the different types of property you can buy. With a freehold, you are buying the property and the land it is built on. Leasehold means you buy the property but only a share of the land it is built on. Houses are almost always freehold and flats are normally leasehold. Maintenance charges will be paid to a management company for the upkeep of communal areas on leasehold properties.

Contract

The legal agreement entered into by the seller and buyer of a property.

Surveys and Searches

A survey is an inspection commissioned by a buyer and carried out by a surveyor to report on the physical condition of a property and to highlight any repairs that are required. A survey for valuation is a report paid for by the buyer but is carried out on behalf of a lender to ensure that the value of the property is sufficient to cover the mortgage. Buyers should not rely on this type of inspection to confirm the physical condition of the property. Search is a term used to describe documents showing any adverse factors affecting a property (e.g. new developments being planned close by or environmental issues in the vicinity). Obtaining searches is part of the conveyancing procedure conducted by your solicitor.

Disbursements and Legal Fees

Disbursements are the costs which your solicitor pays on your behalf – such as Stamp Duty – and legal fees are what you pay for the solicitor’s time. Note: First-time buyers do not pay Stamp Duty on properties worth up to £300,000.

Title Deeds

A legal document that sets out the rights and liabilities of the ownership of a property.

Exchange of Contracts

The point at which the buyer and seller exchange the signed, legally binding, contracts for the purchase and sale of a property. At this point the buyer will pay the deposit and both the seller and buyer become committed to complete the transaction.

Completion

The finalising of the sale when all the money changes hands and the purchaser acquires the legal right to the property. The property is now ‘sold’, and the buyer can collect the keys to their new home.

Flying Freehold

A flying freehold is formed when part of a property overhang and is supported by a different freehold property or land.

Covenant

Covenants are obligations and restrictions that are attached to a property. All covenants should be discussed with your Solicitor and Conveyancer. If you would like to discuss purchasing as a first-time buyer in further detail, please contact the team on 024 7622 0707 or alternatively email enquiries@beslegal.co.uk.

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The purpose of this blog is to provide information and discussion. Nothing on this blog should be relied upon as a substitute for legal advice from a qualified solicitor regarding any actual legal issue or dispute. Nothing on this website should be construed as legal advice or perceived as creating a solicitor-client relationship. Please note that we cannot give advice on individual’s situations or problems on this blog.