Buying or selling a house? Here's a brief breakdown of the legal jargon! - The Law House Family Law Solicitors, London & Peterborough

Buying or selling a house? Here’s a brief breakdown of the legal jargon!

By in Property Law Category on January 29th, 2018

Buying and selling a property can be stressful and so can the legal jaron.  So if you have just decided to buy a house or you are about to sell your house and it has been so long since you purchased it, you cannot remember what all the legal jargon means, read on.  Well this blog will hopefully help and give you a brief breakdown of the main terms you need to get up to speed with.

Freehold or Leasehold?

The most common question you will be asked when buying or selling a property is whether the property is freehold or leasehold.  The difference between the two can have a major impact on what rights and responsibilities you will have over the property. Make sure you know the difference!  Very simply put, when you own the freehold, you own the property and the land it is upon.  Whilst they may be some restrictions as what you can do with the land and the property, these are usually limited.  With leasehold, you will obtain a right to the property, but not the land it is upon.  You will retain this right over the property for the length of the lease term, typically between 80-125 years.

Although you will own the leasehold, there will ultimately be someone who owns the land itself, known as the freeholder or landlord.  The freeholder will;

  • manage the land;
  • carry out any repair and maintenance works to the exterior and common parts; and
  • insure the build and will collect the service charge from you as a contribution towards to the costs of the above.

Occasionally you can own a share of the freehold. Leasehold properties are mainly flat.  Typically you will own the flat and you will own a share of the freehold land alongside the other flat owners who own the leasehold to their flats.  This can be very beneficial. It allows you to be your own landlord. You will typically have more control over what you can do with the property.

Land Registry

So how to establish whether the property is freehold or leasehold?  If this is not already known, then a register of title can be obtained from the Land Registry.  The Land Registry records all known information about registered properties in England and Wales (which is the majority these days).  The register of title will confirm whether the property is freehold or leasehold. It will state who the current owners and other relevant information. You do not need to obtain this yourself, as a copy of the register of title will be provided in the seller’s solicitors in the “Draft Papers”.

Draft Papers

The Draft Papers, sometimes known as the contract papers or just the papers, are largely the registers of title and other relevant title documents. These other title documents are known as the Protocol Documents.  The protocol documents will confirm which fixtures and fittings will remain in the property. They also provide you with more information about the property.  For example, who is responsible for maintaining the boundaries; or whether there have been any disputes; or details of the parking arrangements. The Draft Papers will also include the draft Contract and occasionally the draft Transfer.

Contract and Transfer

The draft Contract  is also known as the agreement. It is the legal agreement that will contain all the key details about the purchase.  It will not become legally binding until contracts have been exchanged.  The Transfer is a legal document . It will be used to formally transfer the ownership of the property to buyer after completion.  As well as approving or amending (if needs be) the draft Contract and Transfer, the buyers’ solicitor will review the Draft Papers in order to raise any enquiries that they feel necessary.  At the same time, the buyers’ solicitors will order the searches.

Search Results

In order to find out more about the property, searches will be ordered by the buyers’ solicitors.  There are numerous searches, which can investigate any number of potential issues.  However, the main searches typically include the water and drainage, environmental and local authority.  The water and drainage searches confirm the water supply and sewerage arrangements in place.  The environmental search looks to establish whether the property is or will be affected by issues such as flooding and subsidence.  The local authority search confirms:

  • if the property is within a conservation area;
  • which limits what building works can be carried out;
  • whether the property is listed; what building works have been carried out to the property;
  • or if there are any plans to carry out large scale development works in the area to name just a few points.

Another common search to obtain is the chancel repair liability searches.

Chancel Repair Liability

Chancel repair liability is a historic requirement still enforceable today. It requires owners of a property to contribute towards the maintenance of nearby churches.  Although rarely enforced these days, the church still has the right to do so and many properties in England and Wales are still potentially at risk.  When enforced, it can cost the buyer £1,000s.  Sometime, the chancel repair searches indicate that there is a potential liability. If this happens, your solicitor (if you are the buyer) should advise you about obtaining a chancel repair indemnity policy.

Indemnity Policies

An indemnity policy seeks to insure the buyer (and sometimes the lender) against potential risks.  This is normally be a one off payment upon completion. The policy will either last for a set period of time or indefinitely.  Indemnity policies are designed to protect the insured and pay the costs for any claims made for the specific issue the indemnity insurance has been obtained for. Indemnity policies can be used to protect you against such issues as chancel repair liability mentioned above.  They can also be used if building works have been done without proper planning permission or if there are legal concerns that need to be insured to satisfy a lender.


Once the buyers’ solicitors have received satisfactory replies to all of the enquiries raised, they will report to their client.  The report will include a summary of all the essential information about the property.  Once the buyer has confirmed they are happy with everything and provided their solicitor with signed papers and the deposit funds, they will be able to proceed to exchange.

Exchange is when both the buyers and the sellers legally commit to buy and sell the property respectively. They legally bind themselves to complete the transaction on a set date.  This is typically a week or two after exchange, but can be a lot shorter or a lot longer depending on the needs of both parties.

Until contracts have bene exchanged has occurred, either party can walk away without any legal consequences.  However, once you have exchanged, you are legally bound to complete when agreed and the buyer will need to pay the deposit.


There is often confusion when the term deposit is used.  Brokers will often refer to it as the difference between the purchase price and the mortgage advance that the buyer will have to put down.  However, legally speaking, the deposit is the amount that the buyers will need to pay upon exchange of contracts.  This is typically 10% of the total purchase price, but this can be varied if required.  Once you have exchanged, you can lose the deposit if you fail to complete on the date agreed.  As such, you must only proceed to exchange when you are absolutely sure about doing so.


This is the day when the sale of the property is finalised. Monies are sent to the sellers’ solicitors and completion officially occurs. The buyers are able to pick up the keys from the estate agents and their solicitor will happily accept a nice bottle of wine off you as a gift for all our hard work (I prefer red if you are wandering)!! I just want to make it clear that we fully comply with the Bribery Act!  After completion and whilst you are moving in, your solicitor will deal with the payment of the stamp duty on your behalf and complete the application process to register the property in your name.

If you are thinking about buying or selling your home and would like expert advice then please contact me on 020 3150 1919 or email me, Luke Corby-Owen at