Last year, Three UK launched an advert centred on a man on the dreaded “meet the parents date”. Flustered at the lavish setting and obscure menu, he gets resourceful, he slyly checks his phone for the definition of “gravlax” from the menu and orders in front of his impressed consorts.
New experiences bring new terms, and purchasing a property is no different. From choosing the right location – with the beach front views, the quiet neighbours and the kitchen with the perfect counter tops – to deciding your purchase limit and securing a mortgage, there is a lot to consider. Then comes the legal jargon, the abbreviations and the acronyms, your purchase has suddenly become an onslaught of new terms.
But fret not, because when you too need to get resourceful (and no doubt check your phone), you’ll be greeted with the following array of definitions to put your mind at ease.
Simply put, the “Missives” form the contract to sell/purchase a property. Beginning with the Formal Offer, the Missives comprise the various letters between the purchasing and selling solicitors and usually implement the “Scottish Standard Clauses” as their template. Details such as the fittings and fixtures to be included in the sale or warranties relating to water and drainage supply are contained within. The solicitors on both sides will go back and forth deleting and amending certain clauses through “Qualified Acceptances” until both parties are satisfied at which point the Missives can conclude. A common misconception is that the initial Offer forms the binding contract, in reality, the parties only become contractually bound to the transaction once the Concluding Missive is issued.
Contrary to what many believe, as the Purchaser of the property you don’t partake in signing the document that transfers ownership. The “Disposition” as it is known, is prepared by the purchasing solicitor following various checks relating to matters such as the ownership or any “Burdens” on the property. Once the Disposition is approved by both sides, the Sellers will sign, thereby “disponing” the property to the Purchaser.
An expansive topic in themselves, at their core Burdens relate to certain obligations on the property owner. The amount of Burdens on a property differs from case to case and their obligations can range from maintenance duties to limitations in use. The Purchasing solicitor is tasked with ensuring that the Burdens are identified prior to settlement.
If, like so many others (probably just me), you spent your teens under the impression that “Stamp Duty” was in some way related to sending out postcards, a name change was warmly welcomed. On 1 April 2015, Land and Buildings Transaction Tax (LBTT) replaced UK Stamp Duty Land Tax in Scotland as the tax payable on purchases of land or property.
A tiered system, the cost of LBTT correlates with the purchase price of a property. As of the 2022-23 tax year, residential purchases above the price of £145,000, or £175,000 for first-time buyers, are subject to LBTT and payable within 30 days of the date that the transaction settles. Your solicitor should advise on the cost during the transaction and handle the payment on your behalf.
On top of LBTT, certain purchases are also liable to an “Additional Dwelling Supplement” (ADS). ADS is triggered in transactions involving the purchase of a second property e.g. a buy-to-let. It is payable on second purchases over £40,000 at a rate of 6% of the purchase price.
Title Plan and Title Sheet
The time has come, you have navigated the missives and expended on the taxes, you are the registered homeowner and in comes… a pdf?
In an effort to adapt the property registration system to meet the demand of a faster paced legal world, The Land Register of Scotland has steadily been replacing the previous General Register of Sasines. The difference between the two? The paper based Sasines register was a collection of deeds through time, as ownership of the property changed, the collection of documents reflecting this change would pass to each new owner. The Land Register instead opts for a digital service based on the Ordnance Survey map, the aim being that each plot of land will have its ownership clearly defined with efficient updates.
The practical difference here is that you will no longer receive the physical deeds relating to the property and will instead be issued with a digital Title Plan and Title Sheet. The Title Plan will show the extent and boundaries of your property as plotted on the OS map, whilst the Title Sheet is broken down into four sections containing information on the property description, ownership, securities i.e. the mortgage over the property and any Burdens.
The terms used throughout the purchase of a property are not likely to be used in your day-to-day and your solicitor should guide you through the process. Oh, and gravlax is cured salmon with sugar, salt and dill for when you need that first meal in your new home.
If you are looking to purchase a property please contact a member of the Blackadders Residential Conveyancing Team working in Aberdeen, Dundee, Edinburgh, Glasgow, Perth and across Scotland.