Conveyancing Jargon Buster

10 April 2017

When buying or selling a property, you will hear certain words and phrases mentioned by estate agents, mortgage lenders and Lawyers. These can be difficult to understand and may make no sense at all, such as gazundering or gazumping.

Below are some key phrases you may come across, together with their explanations.

Conveyancing Chain

When you have received an offer on your property and you make an offer on another property which is accepted, the seller will usually go and find their new home and put an offer in. This process of involving more than one party is a ‘Conveyancing chain’. The chain stops when someone is buying an empty property. You will appreciate the more people involved, the longer the chain. And the longer the chain, the more time it usually takes for the Lawyers to complete their requirements

When involved in a Conveyancing chain, delays can also happen on the day of completion, which is the day you move home. The person at the bottom of the chain who only has a property to buy will provide their balance of funds to their Lawyer before completion. Their Lawyer will request the mortgage funds and, hopefully on the morning of completion, send the funds to the next Lawyer in the chain. When this Lawyer has received the funds they will send it, with their client’s shortfall, to the next Lawyer in the chain. This process will continue until all funds have been sent to the top of the chain.

The difficulty with chains on the day of completion is the time it can take for funds to be received at the top of the chain before the cut off time, which is usually 2pm although it can be as early as midday. Your Lawyer will explain the process and also the cut off times. If the money has not been received in time, you may find you are served with Notice to Complete, or find you do not have a property to move into as the keys will not be released until the seller has received your funds. Your Lawyer will discuss what happens on the day of completion, together with any potential risks should the matter not complete in time.

Property Information Form PIF (PIF)

A PIF is a ‘Property Information Form’ which the seller must complete. It’s a series of questions such as who owns the boundary, what works have been undertaken at the property, and what guarantees are included. The seller will forward the completed document to their Lawyer who will check and send it as part of the contract pack to the buyer’s Lawyer.

A Property Information Form is an important document as it forms part of the contract pack and will be relied upon by the buyer. It must be accurately completed to avoid any future potential claims. The document is usually accompanied with the Fixtures, Fittings & Contents Form, which is a list of items being left at the property, being removed or that do not exist at the property. 

Exchange of Contracts

During the Conveyancing process, the seller’s Lawyer will draft the contract documentation and send to the buyer’s Lawyer. The buyer’s Lawyer will raise enquiries, obtain searches, and write to the buyer with a full report on the property, before requesting a deposit. Once the buyer has provided the deposit and has agreed a completion date, the Lawyers will contact each other and carry out an ‘exchange of contracts’. At this point the transaction is legally binding.

You can read more about exchange of contracts here. Before exchanging contracts you need to ensure that you understand what you are buying, have your finances in place and have a mutually agreed moving date.

Certificate of Title (COT)

A Certificate of Title is something you’ll hear about if you’re buying with a mortgage. When your Lawyer is satisfied with the replies to enquiries and all parties have agreed on a completion date (which is when you become the legal owner of the property), the buyer’s Lawyer will be required to request the mortgage money from the lender. To do this, the Lawyer completes a Certificate of Title, also referred to as a ‘COT’. They cannot do this until they are satisfied the property you are buying is ‘good and marketable.’ By submitting the Certificate of Title they are confirming to the lender that they are in a position to proceed, there are no outstanding matters, and the title is ‘good.’

The Lawyer may request funds to be received the working day before completion to ensure no delays occur on the day of completion. Funds will be received direct into the Lawyer’s bank account as cleared funds to enable the Lawyer to transfer the money on the morning of completion. It’s worth noting that some lenders request 5 days’ notice of release of funds from the date of the Certificate of Title. Your Lawyer will explain timeframes when you are discussing a potential completion date.

Key Undertaking

On occasion you may look to buy a property that requires work, such as a damp proofing or electrical rewiring. If the property is empty, your Lawyer could ask the sellers if you can have access between exchange of contracts and completion in order to undertake such work. If the seller agrees, the Lawyers will draft a ‘Key Undertaking’ which you must sign before the keys are provided to you.

It’s usual that sellers only agree to access if works are a special condition of a mortgage offer – for example, that works are to be completed before the mortgage funds are released. You will be required to provide a copy of your mortgage offer to the sellers Lawyer if this is the case.

The content of a key undertaking will specifically list the works agreed, the time to undertake the works and also ensure the buyer obtains insurance. On some occasions the sellers may insist on the keys being handed to the estate agents each evening and collected in the morning.

Once the works have been completed the lender may require the property to be re-inspected before they release the mortgage funds. Your Lawyer will discuss the mechanics of a key undertaking with you before exchange of contracts. It’s important that you are aware of a timeframe to complete the works and arrange a re-inspection, as this will form part of the agreement.

At Co-op Legal Services we use plain English and will always try to explain legal matters without the jargon. If you are not familiar with any matter when buying or selling a property, ask your Lawyer to explain it to you.

Our Conveyancing partners will always ensure you are familiar with the procedures and phrases used throughout the Conveyancing process. Buying and selling a property is one of the biggest transactions you will undertake, so we want to make sure you are aware of everything that’s involved.

More articles