Thursday 22nd of October 2020
Property

19 Jargon Busting Tips

Whilst you might know your BHS from your CHAPS and BE from the BSJA, it can be trickier to keep up to date with commonly used terms in property particulars whether you are buying or renting.

Our resident property expert, Louise Harrison, an Associate Director with Savills who specialises in rural and equestrian properties tackles a jargon-busting list of commonly used terms from ring fences to EPC’s and wayleaves to AST’s in her latest blog.

 

Basic Payment Scheme (BPS) 

The Basic Payment Scheme (BPS) replaced the Single Payment Scheme (SPS) as the European Union’s rural grant scheme. Farmers or landowners will typically own entitlements, allowing them to claim on their land once a year – normally in May – and payments are made in during the winter months of the same year. If buying or renting  a property of more than 5 hectares, it’s worth seeking specialist advise on obtaining entitlements and making a claim.

Cesspit (or septic tank)

Rural properties may not have access to the mains drainage (sewers), in which case the property will have private drainage which is likely to be to a cesspit or septic tank. These are typically emptied on a semi-regular basis, say annually although newer treatment plants, like Klargesters don’t need emptying so regularly. 

Covenants or Restrictive Covenants

An agreement or contract to do or not to do a specified action upon the land or property, this can either be stipulated in the property deeds (most likely for a sale) or specified in the terms of the tenancy agreement (for rented property).

Easements 

An easement is a right benefiting one piece of land which is enjoyed over another piece of land owned by somebody else.  A common example is a right of access. An easement is a legal interest in land which is capable of being registered at the Land Registry and remains binding even if subject land is sold.

Energy Performance Certificate (EPC)

An EPC gives a property an energy efficiency rating from A (most efficient) to G (least efficient) and is valid for 10 years. It is legally required for all properties advertised for sale or rent unless the property is a listed building. From April 2018, if you are looking to let out a property it will need to have an energy rating of Band E or above.

Land Registry

A database or service in England and Wales which tracks the ownership and possession of a property and land. Around 84% of the country’s land mass is registered so will have a title register and title plan available on the database; the former will identify the owner of the property, any restrictions and charges, and in more recent cases the price paid, the plan will show the boundaries of the property and any rights.

Listed Property

A building is listed when it is of special architectural or historic interest and worth protecting. Listed buildings come in three categories of ‘significance’:

·         Grade I for buildings of the highest significance

·         Grade II* and 

·         Grade II 

Most listed buildings are likely to be Grade II Listed as these make up 92% of all listed buildings.  Historic England (formerly English Heritage) keep a record of listed buildings and there Savills has specialist heritage consultants who can help owners of listed property – https://historicengland.org.uk/

LPG 

Liquid Petroleum Gas usually in bottles or in a tank, as opposed to a mains gas supply.

Secondary accommodation or ancillary accommodation

This is usually in addition to the main house, perhaps suited to guests, family members or grooms. Ideally this should have full planning consent; often newly built secondary accommodation on rural and equestrian properties will have occupancy restrictions so it’s worth checking the details carefully. 

OFCH 

Oil fired central heating.

Managing Agent

A professional or company responsible for the management of the property.

Private Treaty

For Sale by “Private Treaty” is a method of sale used by most selling agents, it involves preparing details of the property and quoting a guide or asking price. Details are sent to prospective buyers, buyers may view the property and either agree to buy at the asking price or submit an offer to purchase. Agreement to buy at this stage (for England and Wales) is subject to formal contracts being prepared between the vendor and the purchaser and those contracts being signed and exchanged between the two parties.

If there are a number of interested parties, then those parties will be invited for “best & final offer” thus ensuring the vendor receives the optimum price.

Other methods of sale include auction, formal tender and informal tender.

RICS

The Royal Institute of Chartered Surveyors (RICS) is the world’s leading professional body for qualifications and standards in land, property and construction. Members of the RICS will often have MRICS after their name.

Ring Fence

The term “ring fence” refers to land being situated in a single block rather in several parcels. If a farm or estate is ‘ring fenced’ then it often means that the land will be in a single parcel surrounding the house and buildings and can all be accessed without leaving the property.

Stamp Duty Land Tax (SDLT)

Stamp Duty Land Tax (SDLT) is a tax charged on property and land transactions including rents (leases) in the UK, where the value exceeds certain thresholds.  How much you pay depends on whether the land or property is residentialnon-residential or mixed-use, and can vary depending on your personal circumstances (for example if you are buying a second home or buying a property in a company). SDLT no longer applies in Scotland. Instead you pay Land and Buildings Transaction Tax when you buy a property. You can use HM Revenue and Customs’ (HMRC) Stamp Duty Land Tax calculator (https://www.tax.service.gov.u k/calculate-stamp-duty-land-ta x/#/intro) to work out how much tax you’ll pay. You may be able to reduce the amount of tax you pay by claiming relief, e.g. if you buy more than one property in a transaction (‘multiple dwellings relief’). 

Sporting/Timber/Mineral Rights 

Often brochures make reference to these rights being included or excluded. These are known collectively as “manorial rights”. Manorial rights are the rights historically held by the Lord of the Manor and include the rights to mines and minerals and the rights of shooting, fishing and hunting. These rights can be owned with the land or owned separately, so when buying a country house or land you may be looking to exercise these rights yourself, i.e. shoot game on the land or fell timber for a wood burning stove; equally you may wish to ensure that no one else has the right to enter the land to exercise these rights, such as mineral extraction. Either way, you will want to check if the rights are owned with the land or separately by a third party. 

Tenancy Agreement  

A legally binding document containing details of the rental terms,  i.e. the landlord and tenant(s), the passing rent, the length of term  and the property address along with the covenants/obligations of the let. An AST (Assured Shorthold Tenancy) is the most common form of residential tenancy agreement in the UK.

Uplift clause 

Also known as clawback or overage agreement, these clauses will entitle the vendor of the property to a percentage of the uplift in value gained by the granting of planning permission or development in the future, often for a set period of years. 

Wayleaves 

A wayleave is a terminable licence under which a landowner grants permission to a third party to use land for specified activities. A common example is utility companies for maintenance of equipment and overhead lines. A wayleave is a form of contractual licence which does not automatically bind future owners of the property, it is not a proprietary right so can be terminated and is not binding on successors in title.

Now you know the jargon, why not test yourself on this fantastic selection of equestrian properties currently  for sale through Savills  – 

Upper Farm, West Littleton, Wiltshire

Guide price £2.95million

Queen’s Court,  Hythe, Kent

Guide price £1.75million

Ashiestiel, Clovenfords, Selkirkshire

Offers over £5.5million

Littleton Manor, Reigate, Surrey

Guide price £3.75million

The Manor, Hatcliffe, Grimsby

Guide price £1.25million

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