Key terms in the Conveyancing process

Title deeds:

Title deeds show the ownership on a particular property. Every time property changes hands, a new title deed is required to note the transaction and change of ownership. Before entering into the contract to purchase the purchaser’s solicitor will examine the title deeds provided by the Sellers Solicitor, checking the title is correct and there are not legal issues in the deeds which need to be raised or queried.

Contract:

A contract is a legally binding document, which is signed by both the purchaser and seller and witnessed by their respective Solicitors. In the majority of residential property transactions, the contract will be governed by the Law Society, General Conditions of Sale. The sellers Solicitor will draft the contract, forwarding this to the purchaser’s Solicitor for their approval and/or insertion of any special conditions relevant to the transaction. When the contract has been successfully negotiated and both parties are happy with the contract, the purchaser will sign the contract and then this is sent to the sellers Solicitor – this is called the purchasers offer to purchase. It is only when this contract is signed by both parties and the purchaser or their solicitor have received a copy of the accepted contract that the parties have entered into a legally binding contract.

Transfer Deed:

A Transfer deed is the document that legally transfers the property into the name of the purchaser. This deed is drafted by the purchaser’s solicitor and then is sent to the vendor’s solicitor for their approval. Following completion this is returned to the purchaser’s solicitor executed by the Sellers, the purchaser’s Solicitor will then have the deed lodged in the relevant registry to allow the legal title to pass to the new owners of the property.

Land Registry:

In Northern Ireland there are two types of land – registered and unregistered land. If the land is registered, it is dealt with by the Land Registry. This is a map based system of title, the key significance of title registered in the Land Registry is that the  government guarantee the title when registered in the central register. Typically, a person whose property is registered in the Land Registry will recognise immediately the fact as they will know if their property has a Folio number, this is a unique number to the persons parcel of land.

Registry of Deeds:

Where a parcel of land is unregistered its title will be recorded in the Registry of deeds. The Registry of Deeds provides a system of registration of documentation about unregistered land. This is a non map based system. Under this system, each time the legal ownership of the land changes, a memorial noting the relevant document is lodged in the Registry of Deeds, along with the original Deed. The Registry of Deeds does not provide any guarantee that any documentation registered is valid; it simply records the documentations existence and its date of registration.

Compulsory first registration (CFR):

Compulsory first registration is the process which transfers property from the Registry of Deeds to the Land Registry. All sales for value in Northern Ireland must now have the title to the property registered in the Land Registry. If a property is being purchased and the title is currently within the Registry of Deeds, compulsory first registration will be triggered and the property must, at the completion of the purchase, be registered by the Purchaser’s Solicitor in the Land Registry.

Freehold title:

The highest class of title possible, a freehold interest means that the owner of the title holds the title free from the hold of any other person and in the title is held in perpetuity.

Leasehold title:

There you buy a leasehold property, you simply buy the right to occupy the land/building for a given length of time, in a similar circumstance to renting a property. You essentially have a lease from the freeholder – however these leases are usually long term and can be for hundreds or thousands of years and which would be subject to the payment of a rent and covenants on the part of the purchaser. The usual covenants on a leaseholder are to pay ground rent (usually a nominal sum) and to keep the property in good repair and condition and not to cause nuisance or breach any other covenants in the lease. At the end of the lease the property returns to the full possession of the freeholder or to their successor in title.

Fee Farm Grant

This is a hybrid type of land ownership which is unique to Ireland. A Fee Farm Grant is effectively freehold title, but with some characteristics of a long lease, including a rent and forfeiture right. The Property (NI) Order 1997 prohibited the creation of any new Fee Farm Grant’s after its enactment and as such, these types of titles are increasingly rare.

Ordnance Survey Map (ACE MAP)

‘Address centre extract’- this map is provided by Ordinance Survey and is centred on the address of a property

Indemnity Insurance:

Legal indemnity insurance is a specific type of insurance policy used in conveyancing transactions where there is some sort of legal defect which cannot be quickly resolves and which is reasonably unlikely to cause any actual loss but does have the potential to cause significant loss. In most cases only one premium will need to be paid.

Stamp Duty (SDLT)

Stamp duty land tax is a progressive tax paid when purchasing a freehold, leasehold or shared ownership residential property. The amount payable is worked out as a percentage of the whole value of the property and the percentage rate payable is graded into certain bands. (as cost of property rises so to does the % of SDLT playable). Different rules apply for first time buyers, home purchasers, commercial purchaser and purchases of second or third houses.

Completion

Before the contract has become binding the parties will agree a “completion date”. The Completion date is the day when full payment will be transferred to the sellers Solicitor and the legal title to the property will be transferred to the Purchasers. Normally, the keys for the property will be made available to the Purchasers to allow them to move in and importantly the sellers will have to vacate the property for the Purchasers.

If you are buying or selling your home, Carmel O’Meara & Co. Solicitors have specialist experience in this area of law, if you would like to speak to someone about the conveyancing process you can arrange an appointment to speak to a Solicitor by:

Telephone 028 87752 455

Email: carmelomeara@btconnect.com