Jargon explained

We understand that there may be terms you are unclear of; if you are unsure we would always recommend you seek legal advice, however we have explained some of the more commonly used words and phrases below:

Absolute Title

The best class of Title available.

AGA: Authorised Guarantee Agreement

A guarantee given by an outgoing tenant on the assignment of a lease for the incoming tenant’s ongoing liabilities.

Agreement for Lease

A contract for the grant of a lease. Not usually required unless one or both parties are required to carry out certain obligations before completion.

Alienation

The clauses in a lease that sets out whether a tenant can allow third parties to deal with the property, either by transferring the lease, underletting the property, charging the lease, sharing the property or allow others into occupation.

Asbestos Regulations

Legal requirements setting out the responsibility for the management of asbestos in a building by the appropriate person, usually the occupier.

Asbestos Assessment

A survey of a property legally required under the Asbestos Regulations highlighting areas of the property containing asbestos and giving recommendations as to its management and possible removal.

Assignment

The transfer by a tenant of its lease to a third party.

Break Clause

The right to bring a lease to an end early by giving written notice.

Building Regulations Approval

Consent from Building Control within the local authority to the construction or alteration to property, usually followed by a completion certificate once the works are complete. Please note that this is not the same as Planning Permission.

Chancel Repair Liability

The liability that a property may have under historic law to contribute towards the maintenance of a local church. See Searches for more information.

Completion

The point that the property legally changes ownership in whatever context the transaction takes, usually indicated by the receipt of monies by the seller/landlord and the dating of the legal documents by the lawyers.

CPSE Enquiries: Commercial Property Standard Enquiries

Standard form pre-contract enquiries raised by a purchaser or tenant’s solicitors of a seller or landlord.  Find out more in our article here.

Debenture

A floating charge over the assets of a company.

Deed of Covenant

A deed entered into by a buyer/tenant to abide by the terms of the lease and/or any specific landlord requirements.

Dilapidations

The wants of repair for property under the terms of a commercial lease. Click here for further information.

Easement

A right over land such as a right of way, right of light or a right of drainage.

Enfranchisement

The process by which a tenant of a residential property exercises a legal right, created by statute, to acquire the freehold title to their property.

EPC: Energy Performance Certificate

Usually produced by the landlord and required for most property transactions. As a property owner, an EPC may also  need to be displayed on the common parts of a building.  For more details on EPC’s, click here

Exchange

The point at which contracts are exchanged and the transaction becomes legally binding. Most commonly found with sales and purchases, although leases can also be subject to a contract.

Fire Risk Assessment

An assessment required to be prepared by law by the occupier of a commercial premises evaluating potential fire hazards and persons at risk and setting out how to alleviate the risk.  

Guarantor

A party that guarantees the terms of the lease for the tenant, and will step in to the shoes of the tenant if the tenant fails to comply with the lease terms.

Heads of Terms

A summary of the key commercial terms agreed for entry into a property transaction, usually prepared by the landlord’s agent.

Japanese knotweed

Otherwise known as Fallopia japonica, a highly invasive and destructive plant for both residential and commercial properties.  Find out more about your responsibilities here.

Land Charge

An entry on the land charges register held by the Land Registry but only used in unregistered land showing a third party’s interest in the land.

Licence to Assign

A landlord’s formal consent to the assignment of the remainder of the lease term by the tenant to a third party.

Local Land Charge

A financial charge or restriction on the use of land registered with the local authority and generally imposed by the local authority, another Government body or by law and revealed in a local search. Please see Searches for more information.

Legal Charge

The method of securing a mortgage or loan on a property.

Option Agreement

An agreement between two parties for the future sale and purchase of a particular piece of land, usually conditional upon an event occurring e.g. grant of planning permission.

Option to Tax

An election made by a commercial property owner to HM Revenue and Customs to charge VAT on the property.

Overage agreement

An agreement setting out additional payments to be made to the seller of a property after the sale has completed occurring where certain contingencies are met such as an uplift in value following the grant of planning permission.

Party Wall

This can be either:

  • a wall that straddles the boundary above ground level and is part of a building, or
  • a wall that does not straddle the boundary but nevertheless separates buildings belonging to different owners.
Possessory Title

Arises where a person has been in possession of land, without having a legal title, for long enough to be recognised as the legal owner.

Planning Permission

Consent from the local planning authority required for the development of a property or a change in its permitted use. Please note that this is not the same as Buildings Regulation Approval.

Rent Deposit

A deposit lodged with a landlord as security against non-payment of rent or breaches of the terms of the lease.

Rent Review

The mechanism for an increase in the rent under the terms of a lease.

Restrictive Covenant

A restriction on the title of a property affecting how a property can be used and enjoyed.

SDLT: Stamp Duty Land Tax

A tax payable on the acquisition of an interest in a property (even the grant of a lease) where the consideration or the net present value is over the threshold set by HM Revenue and Customs. Click here to calculate the SDLT on your purchase. Please ask for advice on the SDLT payable for the grant of a new lease or if your transaction is not straightforward.  This is included as a guide only. Please ask your legal advisor to confirm the SDLT payable by you, particularly where you are taking a new lease, already own residential property or if your transaction is not straightforward.

Searches

Conveyancing searches that are advised to be carried out before you acquire any interest in a property. The most common searches are a local authority search (incorporating a search of the Land Charges register and replies to enquiries), a drainage and water search, an environmental and flood risk search and a chancel repair liability search. Other searches may be appropriate depending on the type of transaction and situation of the land. For more information on what these searches can reveal and why we do them, click here.

Security of Tenure

The right for a tenant to remain in a property after the lease term has ended and to request a new tenancy on broadly the same terms. This right may be excluded by a landlord if the correct procedure has been followed.

Service Charge

An amount that a tenant has to pay to the landlord under the terms of a lease for maintaining and repairing common parts of the building or the estate.

Schedule of Condition

A photographic schedule documenting the condition of the property at the start of the term as agreed with the landlord and the tenant and annexed to the lease to limit the tenant’s repairing liability.

Schedule of Dilapidations

A schedule usually issued by a landlord’s surveyor setting out the wants of repair to the property required to be made good by the tenant under the terms of the lease, usually with a costing.  A schedule issued at the end of a lease term is known as a ‘Terminal Schedule of Dilapidations’.

Term

The length of time for which a lease is granted to the tenant.

Title

When The legal document held (where registered) by the Land Registry showing the ownership of the property and any benefits and burdens on it. Where land is unregistered, title is shown by historic deeds and documents.

 

You can contact our Southampton or Portsmouth Commercial Property teams on the following details:

The Southampton Team:

The Portsmouth Team:

 

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