Property Update - Understanding the Jargon

By Veronica Ryder

You're crazy about the kitchen, goofy about the garden, it's everything you wanted and your offer's been accepted. Now what?

Suddenly you're plunged into a strange world full of unfamiliar jargon. You have to make decisions about mortgages, surveys, insurance policies. No wonder it's stressful.

Unless you've been living on the moon, you'll have heard of Home Information Packs (HIPs) which a Seller must have in place before marketing his/her property. The HIP should be made available to potential buyers, and will contain Energy Performance Certificate (EPC) giving the actual and potential energy rating of the property, as well as documents of title, searches and a Property Information Questionnaire (PIQ) completed by the Seller.

A draft contract will be sent by the Seller's Solicitor to your Solicitor. At this stage, everything is 'subject to contract' - no-one is legally bound to the deal, so if you change your mind (adverse survey, mortgage not available), you can walk away. Trouble is, so can the Seller - if they decide to stay put, or get a higher offer from another party (known as gazumping).

Your solicitor will raise appropriate enquiries and searches having looked through the paperwork - matters concerning title, rights of way, planning approvals etc. Some properties are subject to restrictive covenants: for example, you can't add any new buildings without the consent of the original developer. Windows replaced after April 2002 require either Building Regulations approval or a FENSA certificate. Remedial work may have been carried out under guarantee. It's important that all these approvals are in place.

You will need to pay a deposit on exchange of contracts, usually ten per cent of the purchase price (though sometimes a reduced deposit can be negotiated). The deposit should be lodged with your solicitor when requested, and is paid over to the Seller's solicitor upon exchange.

It is only when contracts are exchanged that the deal is legally binding on Seller and Buyer. A contractual completion date is agreed. Your Solicitor will now arrange for documents to be signed, final searches made, funds requested from your Lender and any balance from yourself. On completion the balance is paid, and you can collect the keys.

Don't forget your Solicitor is there to help - don't be afraid to ask!

Humphries Kirk offer both commercial property solicitors and residential property lawyers. Veronica is a senior member of the property team and is based in Wareham. If you would like to speak to Veronica then contact our Wareham office on 01929 552141 or email v.ryder@hklaw.eu

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