Jargon Buster
Contract
A legal document that sets out the terms of a property sale between buyer and seller.
Contract races
When multiple buyers express interest in purchasing a property and the seller enters contracts with more than one of them, it is known as a contract race.
In a contract race, even though the purchase price may be the same for each buyer, the terms and conditions of their individual contracts can differ. The first buyer to complete all necessary requirements and exchange contracts effectively secures the property.
Contractual obligation
Contractual obligations bind parties to a contract and if these obligations are not met, that party could be held in breach of contract.
Contractual Term
The contractual term refers to a fixed period stated in a contract for which the contract will last.
Covenant
Covenants restrict the use of freehold properties.
Customer
Landlords are customers letting agents and sign contracts instructing them to act on their behalf.
Damp-proof course
A damp-proof course is a layer of protective membrane between bricks to prevent damp from rising through brickwork.
Deeds
Deeds, which are also referred to as Title Deeds, are the official documents that prove a property’s ownership.
Under anti-money laundering rules, agents must be able to verify ownership of a property by seeing the deeds and retaining a copy for five years once the sale has completed.
Dependent sale
When the buyer also has a property to sell, the transaction is known as a dependent sale.
Deposit – Lettings
Also known as ‘bonds’, deposits are paid by tenants to landlords or letting agents as security on completion of the tenancy and its terms.
Deposits are capped at five weeks’ rent if the annual rent is less than £50,000 and six weeks’ rent if the annual rent exceeds £50,000.
Deposits – Buyers
Deposits are given by buyers as a gesture of good faith and can be refunded upon request.
When an agent accepts a deposit, they must adhere to the regulations outlined in the Estate Agents Act 1979. It is also essential for the buyer and seller to inform their conveyancers when this happens, so they can accurately calculate the funds required for completion.
Disinstruction – Withdrawal
This refers to a seller who tells their agent they no longer wish to sell their property.
