Business premises legal glossary
QualitySolicitors believe in providing clear information, without using confusing legal jargon. The law in plain English is a tool to help translate legal jargon into modern English. It is NOT intended to provide “full technical legal definitions” but simply to give a practical plain English meaning.
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- AccrueBe added to/gather
- AdducePut forward.
- AffidavitA document where the law requires the person making a document to confirm what they have said is true. This is confirmed in front of a solicitor or other qualified professional.
- AffirmationA promise made by someone who is not religious, that their evidence will be the truth. This is promised in front of a judge, solicitor or other qualified professional.
- AgreementWhere two or more people or businesses, reach a shared view on a set of facts or what will happen. It does not need to be in writing. It will usually be binding if one side gives something (such as money) in exchange for receiving something in return.
- AuthorityFormal permission given by someone (or the court) to take action on behalf of someone else.
- BankruptcyThe legal status of a person or business who is unable to repay the debts it owes to others (its creditors).
- BarristerA type of lawyer who usually specialises in court room representation, drafting court documents and providing expert legal opinions.
- BeneficiaryPerson receiving a benefit or gift.
- Bi annualTwice a year
- BiennialEvery two years
- Break clauseA term in a lease that gives the tenant (and sometimes the Landlord) the option of ending the lease before the full term is up. They are important if the tenant needs flexibility as he is not sure that he needs the full period. But they can be complicated to comply with and can come with hidden costs – such as having to pay rent beyond the break date.
- Bridging loanA short-term loan (usually two to five weeks) for the deposit needed to buy a property. It is usually needed at the agreement stage (called exchange) which is before Completion date (when you can move in).
- Building controlMost property alterations and building works need to have those works completed to the standard of current building regulations. Therefore the owner is responsible for ensuring the building works are inspected before, during and at the end of the work and that they pass and are issued a buildings regulations certificate.
- CaseLegal claim or legal transaction.
- CaveatWarning or exception.
- Chancel repair checkThis is a check by your lawyer to make sure the property you are buying is not in an area where historic laws mean the owner can be forced to pay significant contributions to church repairs. Insurance cover can be taken out to protect against this risk.
- ChronologyA summary of the main events relevant to a dispute. They are set out in date order.
- CiteMention or quote.
- Co-respondentAny other person involved in the situation that led someone to get a divorce. Perhaps the person who had an improper relationship with their partner.
- CompensationThe financial remedy claimed from the person or business that caused a dispute for their loss, injury or suffering. The amount payable (if anything) will either be resolved by negotiation or be awarded by a judge. It is usually calculated to be the amount of money needed to put the person claiming, back in the situation they were in before the dispute. It is also known as ‘damages’.
- CompletionThe step in the legal process when the buyer pays for the property. The change in legal ownership takes place. This means the seller usually has to move out and the buyer can collect the keys to move in.
- Consent orderAn agreement reached between the parties of a dispute that a judge then approves. This means that neither side can simply ignore it, without any comeback. Being an order of the court there are legal consequences if either side does not follow the terms of the agreement.
- Conservation areaAn area where extra protection is given before changes can be made because of its special architectural or historic interest. Owners of property within in a conservation area need permission from their local authority to make alterations such as adding extensions, conservatories, walls, cladding, changing windows and installing satellite dishes and solar panels. It also covers cutting down and pruning trees and the demolition of a structure.
- ConsiderationAmount paid.
- ContingentDepending on.
- ContractA binding agreement between the people or businesses who reach agreement (and usually sign to confirm their agreement). Usually one side gives something (such as money) in exchange for receiving something in return.
- Contract for saleThe agreement reached between the buyer and seller of property covering the terms of the sale, including the price, deposit, completion date, what is included in the price and any actions the seller must complete (such as repairs and giving vacant possession). It also sets out the consequences for failing to comply with the contract. Once both sides agree, sign and formally exchange copies of the contract it becomes legally binding on them both.
- ConveneCall together.
- ConveyancingThe legal process of transferring the ownership of land (freehold or leasehold) from one person to another.
- CounselA barrister – a type of lawyer who usually specialises in court room representation, drafting court documents and providing expert legal opinions.
- CovenantsA promise made to act in a particular way or to not do something. They are usually made in a property ‘deed’. Nothing needs to be given in exchange for receiving the benefit of the covenant. With freehold property restrictive (or negative) covenants tend to ‘run with the land’ and pass from owner to owner. They are recorded in the title on the Land Registry electronic record. Breaking the promise can result in legal action from the person entitled to benefit (such as a neighbour) – to stop the activity (‘injunction’) and to claim compensation for the broken promise.
- CreditorA person or business who is owed money.
- CulpableAt fault or guilty of something.
- CurtailShorten or limit.
- DeedA written document that creates or transfers a legal interest, rights, powers (such as a ‘power of attorney’ or the transfer of title to property). It is not necessary for something to be given in exchange. It must be signed by the person making the transfer and their signature must be witnessed in accordance with strict rules.
- DefaultFailure to.
- DeferPut off or delay.
- DenoteShow or indicate.
- DepositAn advance payment of money to show an intention to complete the transaction in accordance with the terms of the contract. Usually you will not get the money refunded if you then pull out of the transaction or do not comply with the contractual terms.
- DisbursementAdditional expenses payable to someone other than your lawyer, needed as part of the legal process. For example, taxes, registration fees, local authority fees, court fees and expert charges. They will usually be the same whichever firm you use.
- DomicileThe country you treat as your permanent home. The country where you usually live when you are not on holiday, visiting relatives or working abroad.
- EasementsThese are property rights an owner has over their neighbour’s land. For example, to walk across a neighbour’s land or to have a drain that passes under their land are both examples of easements.
- ElucidateExplain or clarify.
- EngrossmentThe preparation of a final version of a document that covers all agreed amendments.
- ErroneousWrong or mistaken.
- Exchange or exchange of contractsThe agreement stage of buying and selling property. Signed contracts are exchanged between the buyer and seller. The buyer pays a deposit (that is usually non-refundable) and then neither can pull out without consequences. If they do, they may be sued for compensation for breaking the agreed contract.
- ExemplaryGood example.
- ExpediteSpeed up.
- Fair copyFinal copy.
- Fixtures and fittingsItems considered to be part of the property – that will not be removed. Fixtures are legally part of the land and building. Fittings, such as carpets, may be sold with the property or removed depending on the agreement. This can extend to equipment that has been installed and is difficult to move. The price of any fixtures and fittings included in the overall price need to be agreed. The items included should be listed clearly so there is no confusion.
- Form of authorityAn agreement where someone (for example a client) signs it to give permission to someone else (for example a solicitor) to take action on their behalf.
- FraudActing in a way that will mislead others in order to receive a financial benefit or other personal gain. The main examples are through false statements or documents or withholding information.
- FreeholdProperty or land which the owner owns fully and permanently.
- GazumpingAt any time before final agreement is reached (called exchange of contracts) when the buyer pays a deposit, the seller of a property or land can still pull out of the sale and sell to someone else offering a better price or quicker purchase.
- Good title (to a property)The title deeds or official copies of the Land Registry electronic records confirm the named owner has full legal ownership and no one else has rights over the property that might limit this ownership.
- HeadleaseA lease agreement to rent a property to a tenant for rent, where the landlord is the full legal owner (owns the ‘freehold’ title to the property). This is also sometimes called a ‘superior lease’.
- Heads of termsWhen renting a commercial property, the landlord and tenant first agree a summary of the planned arrangements. If they can agree these (which are not legally binding) they then go on to use them as the framework for negotiating the detailed terms of the actual lease (which will become the legally binding contract between them).
- HenceforthFrom now on.
- HMRC or Her Majesty’s Revenue and CustomsThis is the UK government body which collects the taxes and duties payable under the laws made by Parliament. It used to be called the Inland Revenue.
- IndemnifyFully protect against suffering a loss or paying the compensation due to someone else.
- IndemnityThe compensation paid to someone else or the protection given against suffering a loss.
- InsolventBeing unable to pay the debts due to someone else or where a person’s or business’s ‘financial liabilities’ are greater than their ‘assets’.
- InstructionsGiving someone authority to act on someone else’s behalf. An example is a client authorising a lawyer to represent them.
- IntegrityActing honestly and with morals.
- Inter aliaAmong other things.
- InvalidDoes not comply with the applicable rules and so it does not have legal force. It is not effective and is not binding.
- Issue feeThe fee charged by the government (payable to HMCTS) for starting the court or tribunal process for resolving a dispute. People on very low incomes or receiving certain state benefits can apply to not pay court fees.
- JurisdictionThe legal district that applies to a legal case. England and Wales is one jurisdiction. Scotland is another and Northern Ireland is another. Often different rules and laws apply in each jurisdiction.
- Land RegistryThe government run an electronic record of land in England and Wales of freehold title and leasehold title for more than 7 years. Once registered, the owner’s title is guaranteed against others claiming ownership. Most developed land is now registered. The records show the property’s general boundaries (title plan), current ownership, the price they paid (if bought after April 2000), private rights of way or restrictions on the way the land can be used (title register), mortgages and other interests.
- Land Transaction Return (LTR)This is the tax return which must be sent to the government (HMRC) within 30 days of completing certain land transactions, otherwise penalties are payable. It is used to calculate the stamp duty land tax payable by the buyer of property or the tenant renting property under a lease.
- LandlordLegal owner of property or land who rents it out to a tenant.
- Law firmAn organisation which employs lawyers to provide legal advice and legal services – such as the independent QualitySolicitors firms of solicitors.
- LawyerA solicitor, barrister, licensed conveyancer, legal executive, notary, para-legal, patent attorney, legal clerk, legal advisor, trademark attorney, or trainee who provides legal advice and provides legal services.
- LeaseIt is a legally binding contract setting out the terms on which a landlord rents out his property or land to a tenant in exchange for rent. It will set out the duties and requirements of both the landlord and the tenant. It will also set out the term (length of time the tenant can occupy the property) and what happens at the end. Sometimes a tenancy agreement is referred to instead. This is similar to a lease and is sometimes used as an alternative for a short letting.
- LeaseholdProperty or land where the person who owns the leasehold title occupies it for a period of time set out in a document called a lease. This can almost be the same as having full freehold title where the period is as long as 999 years. Most flats and apartments are owned as leasehold property, where the original owner (often the developer) retains the overall freehold title. However this is usually operated by management agents. This will also be the case for commercial buildings where parts of the building are separately sold off.
- Legal feesThe cost of sorting out a legal matters, including the charges of a solicitor and any additional charges needed (disbursements).
- Legal matterA legal transaction or legal case.
- Legal ombudsman or LeOAn independent body who deals with complaints about poor legal services of lawyers and law firms in England and Wales.
- Legal servicesServices provided to the clients of law firms such as one-off legal advice, full representation with a case or transaction and representation at court.
- Liability or liabilitiesResponsibility. This is used in two senses:
•Financial responsibility – to pay tax, debts and loans such as a mortgage.
•Legal responsibility – such as the legal blame for causing harm to someone else.
- Local Land Charges RegistersStatutory records maintained by local authorities in England and Wales. They are a record of restrictions which apply to property (that will also be binding on anyone who buys the property). It also covers planning applications which have not yet been processed.
- Lump sum paymentA one off payment agreed to be paid to settle all or part of a dispute, rather than regular monthly or annual payments being made.
- MortgageA loan to help you buy a property in exchange for interest payments. It is created by a legal document called a deed which entitles the mortgage company (bank or building society) to the security of the property until the loan is paid off (or ‘redeemed’). Until then they have the right to sell the property if monthly interest payments are not made.
- Mortgage brokerSomeone who can be asked to find the best mortgage deal for a person’s circumstances. Often they do not charge directly for this service as they receive a payment (commission) from the mortgage provider selected.
- Mortgage deedThis is the legal document where a property owner (or person about to buy a property) gives the mortgage provider the security of the property (with the right to sell it if the owner does not keep up with the mortgage payments) whilst the loan lasts.
- Negotiate or negotiationsOff the record discussions between the two sides of a dispute or transaction. The aim is to reach an agreement that protects your position. Legal negotiations are usually carried out by each side’s lawyers. They can be in writing, by phone or at a ‘face to face’ meeting. When the negotiations relate to a dispute, then the aim is to also avoid the delays, expense and stress of taking the dispute to a court hearing. Any offers made or points accepted (for the purpose of the dispute negotiations) remain private and cannot be referred to in court.
- OathA declaration of truth made by a person with a religious belief. It is made in front of a judge, solicitor or other qualified professional.
- ObligationA legal requirement to take a particular type of action.
- Off-plan propertyA property that is bought before the building work is completed. The buyer selects it from the plans and drawings. This could be a newly built property or conversion.
- Out of court settlementAn agreement reached by those involved in a dispute, usually after negotiations. The agreement is reached before the court makes a final decision.
- Per annumEvery year.
- Periodic paymentsRegular payments, often each month or year. They can be agreed or be ordered by the court to resolve all or part of a dispute.
- Planning and planning permissionAn owner of land or property needs to consider this when preparing to carry out alterations, building works or maintenance work (that will alter the appearance). They will need to check if this work counts as a ‘permitted development’. If not they need to apply to their local authority for permission to carry out the work. Local guidance and application forms can be found on the local authority’s website. If works have not had permission the local authority can request them to be taken down.
- PrecedentPrevious legal decision.
- Prima facieSomething that, subject to checking, appears to be true.
- Pro rataAt the same rate.
- Property surveyA surveyor will conduct a survey of the state and condition of the property being sold. It is advisable for the buyer to have a survey carried out. The lender will commission a valuation for its purposes but this brief inspection is not a survey.
- Property titleThe ownership of a property. This is usually shown through the Land Registry electronic records. These guarantee ownership, show the general boundaries, provide details of the current owner (if bought after April 2000) and private rights of way, restrictions on the way the land can be used mortgages and other interests. If the title has not been registered then ownership has to be proved through examination of historic documents (title deeds).
- PurchaserPerson or company buying a property.
- RemissionA reduction. With court fees it means a reduction or even that no court fees are payable (if you are on a very low income or receive certain state benefits).
- Remuneration or remuneratePay or salary.
- RentThe money paid by a tenant to a landlord as a payment for being allowed to occupy the property. The amount (and when it is revised) is usually set out in the tenancy agreement or lease. In a commercial lease it is usually paid in advance in 4 equal instalments (referred to as “paid quarterly”).
- Report on leaseA lawyer’s report to their client on the commercial property they are considering renting for their business. It sets out details of all of their enquiries, investigations and searches. They will advise of any problems revealed with the property and where possible, any legal solutions.
- Report on titleA lawyer’s report to their client on the property they are considering buying. It sets out details of all of their enquiries, investigations and searches. They will advise of any problems revealed with the property and where possible, any legal solutions. If they are also acting for the buyer’s mortgage company, they will report to them too.
- RepresentationThis is when you have agreed for someone else to act on your behalf to present your views. Legal representation is instructing a solicitor to provide on-going support and advice throughout a legal case or transaction (and is different from the one-off help).
- RestitutionPayment for loss.
- Restrictive covenantsA clause in a legal document which restricts activity, where legal action can be taken if the restriction is not followed, both to stop the activity (‘injunction’) and to claim compensation.
Examples include, how it is used (perhaps preventing a pub from being run from it) and its appearance (such as restrictions on alterations affecting its height or even the colour). The obligation usually passes from owner to owner (‘runs with the land’).
- Right of wayThe legal right to cross-land which belongs to someone else. It is also a description of the path used. For example, a right of way may give the general public the right to cross someone’s land. It can also be a limited right for a specified purpose at specified times.
- RiskThe chance that a decision or choice might result in a loss or damage. With disputes the ‘litigation risk’ is the chance that a court might award compensation lower than has been offered by the other side.
- SearchesEnquiries made on behalf of the person buying a property to the local authority and other organisations to ensure the seller has good title and the property will be suitable for the buyer’s needs.
- Security of tenureA commercial tenant’s right in most circumstances to apply to court for the grant of a new lease when the current lease ends. With commercial leases for business purposes the tenant usually has this right as a matter of law, unless the landlord is going to redevelop the property or the parties agree to ‘contract out’ from the tenant having this right. This is a complex area on which we will advise.
- Service chargeA payment charged for services such as maintenance and upkeep of shared areas of property, shared with neighbouring owners or tenants. This could cover gardens or grounds and facilities such as a receptionist, security or car parking.
- Service easementsthe right to have the supply of “utilities” (such as electricity cables or sewage pipes) cross the land owned by someone else. It will usually come with the right of reasonable access to carry out repairs.
- Small claimA dispute with another person or business where the amount at issue is under £10,000. It could be a faulty product or item bought from a shop or online. It could be a service provided by a shop or perhaps builder or garage where the quality of the work was not good enough or caused damage. It could just be that someone owes you money. There is a special small claims court process for dealing with disputes where an ‘out of court’ agreement has not proved possible.
- SolicitorA type of qualified lawyer who usually provides specialist legal advice and also representation (support throughout a case or transaction). Using a solicitor or firm of solicitors provides their clients with the protection that a solicitor must act with honesty, morality, independence and in the best interests of their client. They must also have full insurance to protect clients against errors.
- Stamp Duty or Stamp Duty Land Tax or SDLTThis is tax payable to the government (HMRC) on certain land transactions. A land transaction return form has to be completed. It has to be paid within 30 days of ‘completion’ or penalties are payable. It is payable by the buyer of property. It is also payable by a tenant when renting property under a lease.
- Statement of truthWith some legal documents, the person completing them is often asked to sign a ‘statement of truth’ where they confirm the information they have given is true. There are legal consequences (fines or even imprisonment) if it is later shown the person lied or provided intentionally misleading information.
- Statutory declarationA written declaration of truth, which has to be made in front of a solicitor or other qualified professional.
- Sub-let or sub-lettingRenting property (or part of a property) you occupy to someone else. You can either own the property yourself or you can be a tenant renting the property from the full legal owner. If you are the owner you need to check you are allowed to sub-let under the terms of your mortgage. If you rent you need to check subletting is permitted by your lease or tenancy agreement. You will normally need your landlord’s consent.
- SubleaseA lease agreement to rent a property to a tenant for rent, where the landlord is himself the tenant or the full legal owner (of the person who owns the ‘freehold’ title to the property) and is sub-letting to the tenant. Also sometimes called an ‘underlease’.
- Subsequent toAfter.
- Superior leaseA lease agreement to rent a property to a tenant for rent, where the landlord the full legal owner (owns the ‘freehold’ title to the property). Also sometimes called a ‘headlease’.
- Swearing an oathMaking a declaration of truth whilst holding the appropriate religious book (such as the Bible or Koran). It is made in front of a judge, solicitor or other qualified professional. People without a religious belief can choose to make an ‘affirmation’ of the truth.
- Tenancy agreementIt is similar to a lease but normally used for short term lettings. It is a document setting out the terms for a landlord renting out his property to a tenant, in exchange for rent. It will set out the period of time the tenant can occupy the property, together with terms and conditions placed on both landlord and tenant.
- Title deedsThe historic paper records needed to prove ownership and that the owner has a ‘good title’ to the property. However most properties now bought or sold have an electronic record held by the Land Registry instead.
- Transfer of titleChanging the ownership of a property. Usually this happens after a property is sold to a new owner. The final stage of the conveyancing process is for the transfer to be recorded in a document known as a ‘transfer deed’ and for Land Registry records to be updated. Stamp duty land tax is also usually payable.
- Tree preservation orderAn order recorded against a property in the local ‘land charges register’. They are issued by local authorities to prevent felling and to restrict pruning of trees of special value in terms of amenity, history or rarity, especially if they can be seen by the general public. They are also used to protect woodland areas.
- TrialA hearing at court in front of a judge. Both sides to the dispute get an opportunity to present their case and evidence. This usually includes witnesses giving evidence at court (with the judge and the other side being given the chance to ask them questions). The judge will then decide the on the facts and decide what outcome is appropriate as a result. In a few situations the deciding of the facts is made by a jury.
- UndertakingA promise to do or stop doing something, made to someone else who relies on it. It does not need to be in writing. When given by a solicitor as part of a legal case they must fulfil or comply with the promise. If not, the courts will enforce compliance and the solicitor can face disciplinary action for failing to honour it.
- UtilitiesThe supply of gas, water, electricity and drainage (for waste water) to a property.
- ValuationAssessing the financial value of something. This could be the price a property could be expected to achieve or how much compensation a claimant might be awarded by a court.
- VendorPerson or company selling a property.
- WaiveGive up.